I think it's time for the dice to quit bloating the blockchain and memory pools with crap transactions and just make an account system with BTC-balances for those who want to use it and lose it.
If the bitcoin network can't handle it, it has no chance of handling wide spread adoption.
Precisely. The Bitcoin network better be ready to handle 100x as many transactions as SatoshiDICE is spitting out... and that's just for the next couple years.
SatoshiDICE has simply moved the "need to make the blockchain more efficient" further ahead into the present. Instead of the devs tackling the problem in a year or two, they've been forced to tackle it now. And indeed they have... the 0.8v has significant pruning/efficiency upgrades.