[jmorrison]

Regarding (0): I am not sure what mechanisms for penalty would be better way than those currently in play (e.g., disuse/cloning in the case of open source, bankruptcy in the case of closed source, etc.).

I believe Lehman formalizes the dichotomy you imply as bugs in the "model" (you say "specification"), and bugs in the model's implementation. I think the distinction is important in that the model/spec is an evolving/moving target, subject to evolutionary forces. And the number of bugs in the implementation of any given model's snapshot in time is an increasing function of SLOC, and that updating the model can produce more/latent bugs in previously un-buggy code. (Which I take to mean we need minimize lines of code for any given amount of functionality. Less to write, less lines containing bugs, less to modify, etc.)

Regarding (1): I agree that we perform vastly below our potential due to bugs, but also many other factors - though it might be hard to agree on the what those contributory factors are, and their relative contributions.