I believe Danny's point was that it invalidated the midstate to change it.
Nah, I'll own up to making a mistake there.
For some reason, I thought that there were specific Block version numbers that were acceptable under the consensus rules. I guess I just learned something new. I'll read up on it a bit more. So, you guys are saying that the block version number CAN be used as a nonce? In that case, as gmaxwell states, it still has the effect of forcing you to recompute the midstate, so there isn't a benefit to modifying this INSTEAD of the nonce.