there are things that can be done to disincentive miners from attempting to break that limit when it suits them. Did you not understand what I was trying to communicate concerning adding a 'soft limit' propagation rule to the clients? Truly harmless to the network and the client, and only somewhat damaging to the miner, unless a significant enough of a minority of clients participate in this rule, and the miner with an overlarge block ends up with an orphaned block as a direct result. It doesn't have to work every time, just enough for the miners to notice.
It is also truly harmless, that is, utterly uneffective in influencing them in any way, to the big miners.
Sure it might impact miners who are too small to have direct dedicated high bandwidth pipes to the top 51% miners, but the top 51% miners will not even notice if every one of you irrelevant non-mining nodes all stick your heads in the sand at every block on the chain. You just don't matter to the big boys, the most you could do would be help the big boys to shake the small players out of the game faster.
-MarkM-
What if those big miners also had that same soft limit rule? The mining pools of BTCGuild, 50BTC and Slush still collectively represent over 50% of the mining power of the bitcoin network, the rise of ASICs notwithstanding. While it's true that small miners can leverage their bandwidth best by directly connecting to these three mining pools. So, do these three mining pools have an economic incentive to disregard the community will and exceed the soft limit? On the one hand, yes; for they stand to gain more transaction fees just as you guys presume. On the other hand, no, for they depend upon their membership for that hashing power; and it's that hashing power that creates the other incentives to begin with. All three pools depend upon their good reputations with their membership in order to dominate. If even a minority of their membership disagreed with the owners of the pools exceeding the soft limits without the community's overall consent, the pools will suffer hashrate loss. Thus, all three of these pools actually have a greater incentive to participate in the convention set by the community, and resist any players that would not abide. They are, in fact,
most likely among nodes to impose such a propagation rule upon their own systems; partly because of they control a large percentage of the mining power.
In fact, I would here propose that, at the same time that we are raising the soft limit to 500KB, we also ask these major mining pools to include my soft limit propagation rule. Just these three alone would make such a rule quite effective.