My understanding is that Counterparty is functioning, right now, using Bitcoin as a transport layer. In order to do so, it must be using existing, accepted features of Bitcoin.
It is abusing a bitcoin feature in an unintended, unaccepted way that obviously impacts the network to its detriment.
In what way is the array of benefits Counterparty provides to Bitcoin an abuse? Spam is an abuse. Inserting religious messages is an abuse. Counterparty is a *use*.
Because you and Luke do not accept what Counterparty is doing does not make it 'unaceptable'. The two of you may be big wheels around here, but that can change fast if you act in ways that a majority see as counterproductive to Bitcoin, and in this case I think it is clear that you are.
Please spell out here, in detail, with numbers, how you *hypothesize* that Counterparty is impacting the network to its detriment.
If you can put a clearly defined cost on its use then perhaps that can be weighed against its obvious benefits.
There are two different points that keep getting conflated: Counterparty as it is currently functioning and Counterparty as it was meant to function. The former is with bare multi-sig outputs, and the latter is with 80 byte OP_RETURN outputs. Whenever anyone asks how Counterparty is hurting the Bitcoin network, Jeff and Luke refer to the problems that come with bare multi-sig outputs, and gloss over the fact that, if not for an arbitrary, last minute decision to reduce OP_RETURN to 40 bytes, Counterparty wouldn't be "harming" Bitcoin in the way it currently is.
The questions should rather be asked: If Counterparty used OP_RETURN, how would it harm the Bitcoin network?