Some miners still include zero fee txs today because it is not a bottleneck in their processing. When it becomes one you can be assured that only txs with fees that cover the cost of processing will be included. Similarly you can expect miners to voluntarily sign txs for you today at no cost. But in an anonymous system where you have no power to punish a signer who reneges, the signature is not worth anything. And even if it was, it will go away when miners become CPU bound. That's the way of the world.

Nope. The network is working just fine. If you could make 0-confirmation transactions safe (and this proposal won't) that would add value, but bitcoin certainly won't lose value without it.