Steve, I had a dispute with a guy at work about that recently and felt the same way. That was before I decided to forgo WinMo and try Android. I don't miss the stylus one bit. I don't know what you do but I can say that in the business world, where most of these devices get their use, most of your points are irrelevant.
You'd lose handwriting recognition. While I never got it to work well for me, a lot of people have and love it.
With hardware keyboards that's the main way people get data into their devices. Handwriting recognition is not a good reason to keep a stylus because we're talking about a small subset of users. Its not very efficient so losing it is only a benefit.
You'd lose inking in Notes. The ability to add drawings in your notes makes them more useful.
Yeah, if only the pictures were halfway usable

I'm sure someone out there likes drawing pictures on their PDA/phone but I've tried and found that the small screen makes the drawings useless.
Selection for copy/paste operations would be more difficult.
I agree here that losing easy copy/paste is a downside. But that function just isn't something I find myself using enough to matter.
Scrolling large distances is more difficult.
You're not thinking outside the box. First I have to say scrolling long docs on the Android is easy. The phone is incredibly responsive so a quick flick and the page starts flying by and when it gets where I want it to I touch the screen and it stops.
Also in a long list like contacts, a scroll bar is hand but you don't want it taking up the display. When you start scrolling then a scroll button appears and you can grab and scroll with it. Its there when you need it and gone when you don't.
Drawing programs would be almost nonexistent. Trying to draw with your finger instead of a stylus is like comparing fingerpainting to ink sketches.
I appologize to all of the aritsts of the PDA world...but who cares.

This is a business device for most, not a toy.
The learning curve could be worse for experienced Windows Mobile users. New users might like an exclusively finger-friendly interface, but some experienced users might not.
No way. When I got my first WinMo phone the first thing that hit me was...wow, if I wasn't an experienced PPC user this thing would be terrible to use. The move away has been rather easy since there's no OS out there as complex as the WinMo one. Not that I feel its a bad thing...you get a lot of power.
As for your contradiction statement...I assume its because I said the functionality is great but they ned to do more than wrap it in a new UI. No, I stand by that and I'm being serious. It is absolutely inexcusable that WinMo can't run on a 500 - 600 mHz device like the HTC Touch Pro or the Xperia X1 and not have performance issues. The OS needs a total redesign to streamline what's under the hood.
Keep what works. Keep all of the functionality...just clean it up. You can't charge $400 for a phone that is going to suffer major performance issues. I was all set to switch to Sprint and get the Touch Pro and then I played with one. I was shocked at how...not good it was. I was extremely excited about getting to play with it and when I did I left really let down. I couldn't even play with an X1 at the store since they've all been recalled. The guy at Sony Style told me that they didn't say why but he felt that it was because they had some severe performance issues that Sony wanted to work out. $800 for an X1.
Windows Mobile is based on a 13 year old User Interface that was designed for desktop computers. Its time to make a UI designed to be used on a mobile device. Holding up progress at the expense of some of the more esoteric uses of Windows Mobile (and you can come back and tell me how useful they are to you...all I can say is almost noone else cares) is what has left WinMo in the state its in today.