kinda reminds me of the nuclear waste debate. It's a future liability which is not captured by current transaction fees.
Would a simple change to the propagation rule fix this problem: ?
do not propagate if:
fee > unspent transaction output.
Yeah good analogy. It's exactly like nuclear waste.
Your suggestion is a good one; However, it is vulnerable to miners defecting. It would be in the short-term best interests for an individual miner or pool to just comment that line out.
Well at least it would be simple enough to quickly fix the code and maybe offer it as a command line option - and probably has a huge impact. Then SD needs to fix
their problem...
But before implementing that, is there any conceivable reason why somebody may want to send a transaction where the fee is higher than the unspent transaction output (colored coins aside)?