Stephen,
I think this is the key point. Its common sense that peering with the downstreams will improve user quality of service by both reducing latency and taking unnecessary points of failure out of the network.
Is it really common sense? If so, is the common sense correct? In fact, there is a lot of recent work that suggests that there can be a very poor (and as it turns out poorly understood) interaction between richness of interconnection and BGP dynamics; this is due, at least in part, to amplification and coupling effects that appear in some large systems. So many argue that that given the current set of protocols (i.e. BGP and its implementations), increased topological richness beyond some threshold can actually hurt robustness and reliability. And just to be clear about this, this is not a statement about peering policies themselves (I'm explicitly not commenting on that), but rather about our current understanding of some of the dynamics that exist in today's Internet. I've been trying to capture some of this in the following document (with the able help of Randy, Tim, and many others): http://www.ietf.org/internet-drafts/draft-ymbk-arch-guidelines-03.txt On the topic of interconnection richness and its (possibly unanticipated) effects, Craig and Abha's early work on this is maybe the canonical reference. For something a little more recent, see "What is the Sound of One Route Flapping", Timothy G. Griffin, IPAM Workshop on Large-Scale Communication Networks: Topology, Routing, Traffic, and Control, March, 2002. In any event, I guess the bottom line here is that sometimes what looks like common sense (or even what we have a tendency to call "conventional wisdom") may just be wrong. Dave