You get more variance. Full stop. P2pool has higher variance than other pools. The compensation is higher expected earnings from no pool fees, payout of transaction fees, and no risk of being cheated by the pool.
What you say is true, except it really doesn't equate to "higher expected earnings". Yes you can use p2pool with 0 fees, but last I checked, it's frowned upon. Most, if not all pools, now pay transaction fees. And risk of being cheated by a pool is there, but slim. Most pools are well established, we know who is trust worthy and who isn't.
The main thing you get by focusing intensely on minimizing variance is a nice pretty graph of flat payouts. If that is really important enough to you that you are willing to forgo higher expected earnings, go for it. No one can say objectively that's the wrong thing to do, but we can question it.
Again, there is no higher expected earnings, unless you purposely choose not to "donate" to forrest.
BTW, the reject rate doesn't really increase variance though, it just (slightly) reduces the share rate. A share that is rejected is exactly the same as a share that you never found. Other than that the high rejects might be telling you there is something wrong with your setup.
That's like saying if you aren't mining, it's the same as getting a reject. Not sure what your point is? The pool right now is at 19% rejects. You can say all you want about "something wrong with your setup", just realize it's everyone's setup, and certainly not mine, since I'm not in p2pool.
I stand by my statement, high reject rate increases variance. If that precious share rejects after my 4 day average time to find a share, then, on average, it's going to be another 4 days before I get another chance. And then, there's a 19% chance it'll reject too! "normal" pools average around 2% reject rate. That means my chances of getting a reject are 9.5x higher on p2pool than on a conventional pool. How does that not increase variance?
M