I think its a terrible idea. Two wrongs don't make a right.
This will also encourage hackers to loot what they want knowing that the breach will be filled from thin air by the protocol. It diminishes the value of the protocol and undermines consumer confidence.
We must also wait for the busoni to report back what the hacker has in mind before we formulate the best way forward. If he does not return the BTC, short of raising funds for the Poloniex loss there is nothing else we can do. The bounty people planned for the "benevolent" hacker must go to Poloniex even though it may not fully mitigate his loss.
My idea would not encourage hackers any more then the current situation. Hackers will hack, either way.
And besides, that is not a bad thing, we WANT bugs in the protocol to be found as soon as possible.
It is just a matter of deciding who takes the loss now, how to minimize the bad feelings.
Why punish the very first exchange that was brave enough to carry Counterparty? By letting busoni or his users take the loss, we send a message, "Lesson: don't use counterparty, you could lose your money".
The current situation rewards those who hoarded XCP and did not trade (share) it with new users. My idea spreads the damage so thinly that nobody really notices.
Also, this would not be the response in the future. This could be limited to "Alpha" stage only, and once the developers declare we are out of Alpha, it would never be done again.
You are right, it would undermine consumer confidence if this were done a year from now. But it is so early now that my idea would actually create consumer confidence, I think!
Inflation is less scary then having your money stolen on an exchange. Almost all altcoins have inflation and nobody notices. I would rather put my money and time in a software that deals with protocol bugs with inflation then thinking I could lose 100% of my money at any time with no recourse.
None of your statements are wrong, except for the recourse you have in mind, I agree with everything else.
You are right, hackers will hack, however, the hacker in touch with busoni explains the exploit and talks about returning back everything he took and then does not respond for the next few hours. What message do we sent when we are ready to fill the breach in this fashion.
Secondly as you yourself point out, its alpha stage, you use your xcp at your own risk. It has been stated in no uncertain terms by the OP. The current situation does not warrant a wide spread use of the coin, I would like to trade my coins too but I would rather wait for the whole system to mature before I do anything. This is not to say early adopters and the curious minded shouldn't do anything, just that you need to be aware of the risks involved.
I am all for a community consensus to fill the loss borne but it think at this stage its premature to talk about and it needs to be filled from our pockets rather than just generate an extra 35k.