One important reason I'm not moving to an alt-chain is the distributed exchange between bitcoin and MasterCoin, which isn't possible if we are on an alt-chain, since it requires using data from standard bitcoin transactions AND MasterCoin transactions to work.
I don't think I've mentioned that reason anywhere else, but it is probably the primary reason I'm not even willing to consider it. There are other reasons, like total cost of development, and even the dirty stink of starting yet another alt chain (For instance, bitshares is doing it "right", but they were banished to the alt section with all those scam coins, which they of course bitterly resent).
I am totally convinced that building on top of bitcoin is the right way to go, for all the reasons here and above in Ron's posts.
It would be easy enough to build a client that could do atomic cross-blockchain txns... essentially the txn in mastercoin-chain would reference a bitcoin txn and maximum block and be invalid if that bitcoin txn "pair" is not in the bitcoin chain before that block. A subsequent mastercoin-chain "txn" could set a marker that explicitly validates or invalidates the mastercoin-txn so mastercoin-only clients could exist.
None of your mining, minting etc. arguments hold water because its just a fork of the existing OSS bitcoin code.
But really none of these arguments matter. Its great that MC txn fees encourage bitcoin use/velocity. And if it becomes an issue for bitcoin, Bitcoin txn fees will rise to the point where you will move.
I think you are really feeling a backlash because you advertised MC as a service on top of Bitcoin rather than a competing alt-coin. But in truth it is a competing alt-coin that uses the bitcoin infrastructure. Its like you said you are going "sailing" but are actually just sitting in your car on a ferry. MC is technically a service on top of Bitcoin but in essence it is a separate coin.In contrast, Casascius coins are technically not a service on top of Bitcoin (to transfer them you don't use the blockchain). But they ARE in their essence.
But the reality is that an alt-coin is an easy way to raise money without going to VCs. And projects (especially those about money) lose steam without some funding as we are seeing with colored coins.