Relatively low flying satellites are also a solution space debris as they only stay up a few years. The are much cheaper to launch so the fact that they don't last as long is not prohibitive.
Most of your cost-to-orbit is achieving orbital velocity itself. So a marginally lower orbit (LEO is already ~100-250 miles) doesn't seem like it would offer that much in the way of launch cost savings.
Can you substantiate your "much cheaper to launch" statement?
The Falcon9 for example has a payload of 13,150 kg to LEO and 4,850 kg to GTO so that is nearly 3 times the cost (http://en.wikipedia.org/wiki/Falcon_9). Every rocket I have checked has a similarly small payload to GTO compared to LEO.
The problem is that even though its not that much fuel to get from LEO to GTO, you have to haul all that fuel up to LEO first.
But higher LEO orbits are pretty stable from what I understand. I'd have to look up data, but we're talking centuries to thousands of years for decay, no?
Geosyncronous is a whole 'nother matter, and yes, anything placed there will probably still be orbiting when the Sun goes supergiant. Ponder that.
After some quick searching I could not find any trustworthy numbers on how long satellites stay up in higher LEO. My impression is that it's decades at most, but I could be way off.
Definitely not my area of expertise, but my understanding is that the upper reaches of the atmosphere are quite dynamic, and various circumstances (including possibly solar storms) may cause the atmosphere to reach out further than it normally does. Density of the satellite in question, and extent of any large surfaces (solar panels, etc.) which might tend to increase drag or cause tumbling (a bird does no good if it doesn't point right) are other factors.
Can you substantiate your "much cheaper to launch" statement?