I have no opinion on this, and I'm not ashamed to admit I've no idea what the Mastercoin argument is, do you think you could spare a sentence or two as to why you think it's spam Luke, and perhaps the other guy as to why he doesn't think it's spam? Just something short and sweet to inform the rest of us, not a lengthy troll or anything.
tl;dr: People using Bitcoin have all agreed to store financial data and nothing else, using a scripting system to convey it. But MasterCoin transactions include metadata and unnecessary bloat, and lie about what kind of data it is in a way that makes the entire Bitcoin network less efficient.
From my understanding of MasterCoin, there are two ways I, and probably anyone who considers the blockchain to have a social agreement/contract, consider it spam:
1) The unnecessary 1Exodus output indicating it is a Mastercoin transaction.
2) The abuse of multisig and p2pkh outputs to convey data rather than OP_RETURN.
3) Some of the data may be non-financial/transactional in nature.
Basically anything that isn't a pubkey shouldn't be scripted as a pubkey, anything that isn't a hash shouldn't be scripted as a hash, and anything that isn't financial data (not sure if this exists, but it was implied in this conversation earlier that it did) shouldn't appear directly in the blockchain.
There is also an argument that MasterCoin is competing in supply (one cannot convert more bitcoins to mastercoins or vice-versa) and many users may not wish to support it when they store/validate the blockchain. Note I don't hold to this argument myself, as it seems to logically rule out any use of the blockchain for things like smart property (note that S.P. does in fact not require using the blockchain at all, but if it did, I don't see how it would violate the social contract of Bitcoin).
Not per se related to spam, I think it would also be ideal if Mastercoin migrated to its own blockchain - it really has no inherent need to be inside bitcoin's, and does not benefit from being there either. It does benefit from having bitcoin miners securing it, but that can also be had by supporting some form of merged mining, which is just as safe if those same miners freely support it.