Mike's core concern, based on the thread on the Foundation forums, is that Cryptolocker is a serious problem, and because it's such a demonically simple way to extort cash from people, it's going to become a huge problem. There will be many, many copycats soon, and you get enough non-techies getting ripped off and having their first experience with bitcoin this way, and suddenly govs around the world become very hostile to bitcoin (vs barely caring about it, and figuring out how they feel about it as is the case now). And then (or perhaps before), you can kiss any hope of business acceptance of bitcoin (something we all dream of, I'd imagine, so that we can transact in bitcoin without having to resort to exchanges) goodbye.

Mike's example is Tor, which is a network that failed to clean up the abuse that goes through it, resulting in all sorts of networks and sites now banning access from Tor exit nodes, drastically reducing the ability of someone to use Tor to normally use the internet. The same thing can happen with bitcoin, and as someone who does want to be able to transact in bitcion someday, failing to look at ways to isolate bad actors from the bitcoin network is a mistake.

I don't think -anybody- at the Foundation is happy about even having to have this discussion. But the discussion has to happen, because Cryptolocker is a real issue that's going to become a lot bigger soon. There are very few vectors of attack against Cryptolocker (and inevitable copycats), whereas stuff like Silk Road is almost guaranteed to fail long-term due to the huge number of vectors for law enforcement to use against it. Unfortunately, one of those very few vectors usable against Cryptolocker is bitcoin.

I think it's unlikely the Foundation will end up making coin redlisting/tainting/blacklisting/whatever an official policy they try to push, but the idea that we shouldn't even be having the discussion is crazy. The process at arriving at a solution for problems usually involves many dead ends and dark caves before you find the route to the top of the mountain.