No need to be so finicky about the terminologies.
What the OP suggest is to introduce a snapshot block or blocks in the blockchain. Regular blocks are tx which are essentially delta changes to the UTXO set (he calls it accounts). Once in a while, he wants to flatten and write a snapshot. In the process, if some UTXOs are too small, he would discard them turning them into fees. Of course it's a protocol change but it's not impossible to do.
A couple of things to consider though:
- these snapshots will be huge. Even if you do it while blocks are being processed they will need to be mined and properly rewarded.
- they could be a downtime while these blocks are produced but you could mix snapshot UTXOs & normal tx though.
Not a big problem and it's done in a few applications but at the moment, the blockchain growth is not a big deal. Even if you think the block size grows linearly, the accumulated blockchain only grows quadratically - not exponentially.
Besides trimming spent tx introduces other problems for deterministic wallets.
Btw, it's not a new idea and has been mentioned a zillion times.
I'm not sure that what the OP is suggesting is what you think he is suggesting, but if he is then what is the benefit of his method over the method in the original whitepaper since both methods will need to store the all transactions that still belong to the UTXO and can remove all the rest of the transactions?
It seems that his method adds additional complexity with minimal (if any) benefit.
