One big problem is that the block chain is going to be filled with dust. Any time you send money, you run the risk of receiving change in an amount that is below the limit and therefore cannot be spent.
You're misunderstanding. This doesn't inhibit the _spending_ of small outputs, it inhibits the creating of them.
The wallet software already avoided creating them because they'd trigger fees higher than the amount being received as change.
You been drinking the Gavin juice too much. If I want to send a 0.00000001 BTC to someone, I can't under 0.8.2. If I want to do that in 0.8.1, the fees are high but that still means I CAN DO IT. Do you now see the censorship.
You can still do it, but instead of having to pay 50,000 times the amount in fees you have to find a miner willing to do it or mine the block yourself (with p2pool if you want to pool).... this is no worse than all the other kinds non-standard transactions that I listed, which you happily ignored. Instead of paying an enormous amount in fees, you can instead just add that to the amount you are paying. It's silly to force you to give funds away from miners as a proxy for trying to get you to not create outputs that aren't worth spending.