I would like to see a complete removal of the plain text wallet.dat. It's like leaving my physical wallet full of cash on a park bench. How this be done and still allow the client to act as a node in the network.

Please explain. Do you believe that wallet encryption is important but is not currently the most important thing to Bitcoin's continued development or do you mean that wallet encryption in general should never happen.

It should easily be possible to split the wallet file into two different sections, one containing the public keys + addresses and the other encrypted section containing private keys. This can be separately encrypted with AES256 (or similar) within the same file and provide the necessary protection against someone stealing your computer and immediately gaining access to all the Bitcoins stored on it. You could then have peace of mind once a backup is restored that your coins are secure.

If I am wrong, explain your reasoning clearly.