@Mark
I think you are looking at the from the wrong perspective. In an ideal world, everyone would code to standards and the release of IE8 would be a non issue. Unfortunately, the majority of sites out there don't use standards. Yes, this is the developers fault, and they SHOULD be using standards, and it IS their fault, but you are looking at it from the developers point of view.
Now look at it from the users point of view. Your average user will upgrade to IE8 because Windows Update told them to, and start browsing the web with it. Then they find all the sites that used to work, suddenly don't. This is of course the developers fault, but the users won't see it that way - they will think it's the browser that is 'broken' and has bugs. So what are they going to do? Use something else / go back to IE7.
As much as its 'fun' to say 'well serves MS right' and as much fun as it is to bash MS for previous browsers, it just doesn't make sense for them to lose all the IE market. Instead of just saying 'well we will carry on rendering it the old IE way', they are meeting developers half way - they are taking a big risk in the name of keeping the web developers happy here. I don't think people quite appreciate or understand how far MS are stretching to meet our demands. They are saying that IE8 will render everything in full standards mode, and provide webmasters with an optional switch to trigger IE's 'old' rendering mode. This way, web developers don't have to rewrite sites (maybe it was a site written by someone else and taken on by them - not necessarily their fault that their site is crappy), while progressing the standards compliance of the browser and bringing it in line with the others.
Of course, you can just refuse to take part & use the switch, in which case MS will probably decide that leaving IE8 rendering the old way by default is their best plan. Noone wants this. They will be the first to admit that they made mistakes in the past (The fact that they have pledged full standards support should tell you this), but that isn't the issue here. The issue is how to get them back on the right path and make their browser better. What they are offering to help them get back in line is, I think, a great solution, and refusing to use that solution just because MS say you should is completely pointless, and will probably damage the chances of MS sticking with the 'standards by default' in IE8 plan.
5-10 years in the future when <IE8 is dead and used about as much as IE5 is today, everyone can forget about the 'bad' IE, the tag won't have to exist any more and everyone lives happily ever after.