Imageboards use that syntax for quotes as well, italicizing and changing the text color, highlighting the quoted text without the scrolling issues of a blockquote.
I had a userscript doing that on HN for a while along with as other text fixes, and the result seemed quite readable.
> something quoted which is very long and let's pretend it wraps lines
look something like this (sans horizontal scrolling):
I get that HN doesn't want to be markup-heavy (a sentiment with which I agree), but posters quote things all the time and it's always ugly if line wraps are involved.