The block size issue has the possibility of crippling satoshidice.
Unless they start doing things more efficiently the network will act to defend itself one way or the other against the SD "attack" whether through increased fees or blocking SD transactions altogether. SD may have to invest in its own mining equipment if it wants to continue its wasteful ways.
Are you serious?
Bitcoin won't block S.DICE transactions. They are already paying twice the needed fee.
There's no such entity as a "Bitcoin" that can choose whether or not to block or not S.DICE transactions.
Any blocking would be done by individual pools. It would only take one large pool to actively be hostile to S.DICE to make them unable to allow zero-confirmation bets at all. If a pool discards S.DICE transactions but intentionally allows competing transactions from same source to process then the pool only needs a few % of network power for anyone to profitably attack S.DICE by trying to double-spend any losing bets - the few % of times the pool includes the double-spend (and cancels the losing bet) then outweigh the house edge on the rest of bets. You underestimate the extent to which some are opposed to S.DICE (not me - obviously).
When I used the term bitcoin, I meant the 'Satoshi' client / bitcoind. Pools won't be able to shut down SatoshiDICE - only make them require 1 confirm for bets.
I agree with that - but point is that making them require 1 confirm for all bets would very likely reduce profits: as a lot of people won't gamble if they have to wait an average of 10 minutes to find out whether they won.
I'm not sure HOW you think the client/bitcoind COULD block S.DICE. Prevent masses of transactions to a single address (no point using specific addresses as new addresses can be generated easily)? Any such cure would be worse than the 'problem' it's supposed to fix.
If Bitcoin isn't meant to handle the sort of transaction volume S.DICE produces then how is it ever supposed to achieve widespread adoption?
Trying to block S.DICE at the bitcoind level is treating the symptom rather than the illness.