People doing things like covering up an 800k+ BTC theft "for the good of Bitcoin" is what will probably kill Bitcoin in the end. However good your intentions might be, if people can't trust the people running exchanges they won't use Bitcoin services. Doing something dishonest such as covering up a major crime for the "right" reasons is still dishonest. As beneficial as a secure anonymous currency may prove in the future, this debacle just goes to show how important the human factor is, and no amount of clever crypto is going to stop that.

> thousands of lives have been destroyed

is this sarcasm? i don't understand the tone. that part seems to be sarcastic yet the rest seems to be straight.

Point 3 in the "plausible scenario" seems obviously bogus to me. If they knew about transaction malleability, they could have addressed it easily the same way the standard client does it, rather than intentionally leaving a gaping hole just so they could have an excuse for insolvency.