Ok, so I think I understand. It lowers the barrier to entry for a block withholding attack...

My point was that there is no such thing is 'working' on a block, it is either solved or not solved. In the case where the greedy miner is forced to reveal the block before finding a second block secretly, there is no benefit. It would only have been realized as a benefit if he finds 2 consecutive blocks before the network forces him to reveal the first block.

3 questions:

1) Has anyone calculated the window for execution of such an attack? Either empirically, numerically, or both? My suspicion is that it's actually quite a bit smaller than most people would anticipate. (but I could be wrong!)

2) If the effect is small and doesn't present appreciable bias towards larger pools, would allowing block withholding be something that bitcoin could just be agnostic too?... as long as it doesn't effect the overall network, it's like allowing miners a little gambling with their blocks [again assuming the overall affect on the network is small and doesn't provide advantage to large pools]. My instinct is that it would have almost negligible effects on block frequency, and that if all miners played the same game, it would have almost no bias.

3) Is this something that's simply politically unworkable [assuming that the final decision is really up to the miners]? Even if the real benefit of withholding a block was smaller than anticipated, is this something miners would simply be too resistant to?

I'd be willing to find analytically/numerical solutions to how a potential attack could be executed, and quantify its potential effect on the overall network, but if this idea has already been put to rest...