15 years ago a defining difference between the IETF and the ISO was that the IETF cared about what happens in practice and the ISO cared about what happens in theory. As far as I can tell, the IPv6 site local discussion on both sides is only about moot theories.
Without getting into the other points of this argument, let me suggest that Vernon is correct on this point, and in as much as we think site-locals are bad we must provide a better alternative. In order to do that we must address the underlying needs for site-locals. Many have written at length on this subject, but it all seems to boil down to this:
We need a way for sites to be internally stable even when their relationship to the world around them changes for whatever reason.
This goes to the heart of identity and service location. In as much as we can address this problem we would do much to nullify the arguments for site-locals. IMHO this is where the IETF, IRTF, and other bodies should put our efforts.
Eliot