@da2c7
Why would a generator refuse a transaction with any amount of fee if s/he can still add it to the block?
A bank doesn't need to mind with transactions the way you suggest. All transactions in between its clients don't need to be real bitcoin transactions, they can be just updates in the bank database. The bank would only need to send transactions to the chain when transferring from/to an "outsider" address.
Some will, that is charitable, but most arent that charitable (and this is a good thing). I think that an analogy is in order.
A man runs a bakery; he bakes a certain amount of goods early each morning, and sells them throughout the day, when he has leftovers he may reduce the price to flog the bread off, or may take it home for his chooks to eat.
The fallacy that this entire discussion has been trapped into is the assumption that the selfish thing is to accept every transaction, no matter how small the fee is, rather that is altruistic. The real selfish thing is to accept whoever pays into the block.
See most that run bakeries know that most people buy the bread anyway, cheap or not. They just wait until the end of the day when it is on sale. That is why it is (more) profitable to take the bread home for you chooks.
Both bakeries and generators work on the lovely formula: Average Price = (Total Cost + Profit) / Average Sales.
On banks, banks will allow members free or cheap transactions for personal use, if they report the transaction to the bank.
I think there is an important difference. When one generator is faced with deciding to take tiny fees and fill up the block or leave them will compare the immediate gain of fees to his future loss via the general reduction of fees. But unless he has significant market share this general influence will affect other generators more than himself.
I was thinking that he should ignore the influence on other generators and simply calculate how much on average he expects fees to rise by keeping the cheapest fees out of his blocks and see if it is worth it. But then I realized that he actually benefits from reducing fees because they will remove marginal generators and decrease difficulty resulting in him generating blocks more quickly. And he will keep these particular small fees from going to a competitor as well.
I still can't say for sure, but I think the best strategy will be to accept all fees.
The bread story is not so good because almost everyone prefers the morning bread and won't wait just for a discount.