I agree with what you said. Is it correct that we are not at the stage where the fee can be distributed across the network? At the moment those fees we are talking about would be taken by the miners but there is nothing to stop those fees disbursed across the network in the future.
It's
possible. Whether it's practical, is another more complicated issue

Am I correct to say that we don't disagree that:
1) Counterparty messages are financial transactions
2) There is scope to include Counterparty messages in the blockchain as long as :
a) It doesn't cause undue burden on the network
b) It doesn't open the door for other abuses of data storage in the blockchain
This seems fair.
Counterparty requirements
1) 80 bytes of data
2) Counterparty transactions are relayed through the network as normal transactions
Do you think it is possible to reach an agreement from your side on how we can achieve these requirements? If so can you think how this could be possible?
I don't think those requirements are reasonable.
Why does it matter how much data XCP can use, or how the transactions are relayed?
What should matter is that people can use it for A, B, and C goals.
The technical side is just a matter of implementation, not requirement.