Actually I look at is as if the Account tree is a tradeoff.
You need to keep transaction up to a certain period. That is just how it works for any payment system. and that is what users will expect.
The whole purpose of the mini-blockchain scheme is to increase scalability. Just imagine if Bitcoin were to reach the level of traffic that Visa must handle on a daily basis, there is no feasible way that all those transactions can be stored within a blockchain which records every transaction forever. The transactions are the bulkiest part of the whole bitcoin scheme, so what the mini-blockchain scheme aims to do is limit the number of transactions which are required to be stored by every node down to only a week or less of transaction history.
There isn't really any trade off involved because users can save the transactions which correspond to their addresses if they want to keep a record of the transactions they have made, but there's no need for them to store any of the other transactions longer than the cycle time of the blockchain. But any node that wishes to save a year or more worth of transactions can do so if they are willing to give up the disk space required; the key thing is that no node is required to store any transactions longer than the cycle time of the mini-blockchain, and that enables anyone to quickly synchronize with the network instead of having do download gigabytes worth of transaction history.
I think your proposal is interesting, however I don't think you can discard transactions.
Yes you can discard transactions after a period of time so long as you have a method of maintaining a secure ledger which records the exact balance of each address. That is what the account tree does. It is a compact snapshot of the entire system in a sense, but it's a snapshot which gets updated with every new block. The transactions in each block don't link back to other transactions like they do in Bitcoin, they simply issue commands which say "take X number of coins from the balance of address A and give them to the balance of address B". So long as the balance recorded in the account tree for address A holds at least X number of coins and so long as the transaction is signed with the private key of address A then the transaction will be accepted by the network. There is no need to look back at historical transactions, so they can be safely discarded when they fall outside the mini-blockchain.
