i didn't have the intestinal fortitude to read all of this thread (it's just before lunch!), but i can't see much of a reason to get wound up about all this. i mean, CYOC! (crap your own crap). i don't see much value in trying to demean folks who don't want to do it with water alone(e.g. "you are SOOOO first world!").
i like a combo approach myself. dig a cathole, do your business, use some tp, put it in the hole and burn it up, mix the burned paper and organic material up with the waste with a stick, cover with dirt. as necessary, wash up with some water (good for chaffing reduction), and always use purell afterwards.
i don't see much of a problem with this approach, as long as you are careful on windy days, so the burning paper doesn't fly off and start a fire (i heard this happened on the PCT in 2004). just please don't LEAVE the paper on the ground or even buried.
i heard that the USFS is opposed to burning now, and was suggesting folks bury the paper (w/o burning) or pack it out. i agree with the latter, but i don't support the former.
p.s. tom, i agree with you fully. always the voice of reason!