Tommy - if you remember - I was one of the few that agreed with you back in the day when we were discussing paid submits a few years ago
I happen to agree with you on this as well - for a few reasons.
First - from a biz model as you mentioned, we have been screwing ourselves for years to make money for sponsors - and they in turn have taken it further with the addition of free hosted galleries and loads of free content for submits, leading to the "easy path" for a bunch of new WMs and killing off a few big content companies in their path.
Second - and I think that there is a low buzz already developing about this - the organizational side of this biz has always been lacking - people have developed into small groups, but never a large "association" that worked towards the benefit of the people that do the real work in the biz (traffic generators)
Third - A lot of self regulation done early on our side would lead to less future attempts at regulation from the outside, and some people still look at the internet as a wild wild west - it still "seems" that way, but with everything from lawsuits to international treaties in the works already to regulate the internet, this will change - and we better be ready.
Last - there are some technical issues that will have to be handled ranging from issues with SE's caching and image hotlinking (copywrite issues) to handling WMs in countries that tend not to care about self regulation but I truly believe that can all be worked out to everyones benefit.
I say we should definitely not let this one drop for a few years like we did with the paid submits