Let me address your last sentence, though. Your statement presupposes a utilitarian moral system. That is, it assumes that a person's position is completely determined by which policy will result in the greatest growth in technology.
I've studied the history of patents as well, and I share your practical uncertainly over which policy inspires more growth. Patents may, in fact, grow certain types of technology faster while inhibiting growth in other areas. Since we need to weigh the harm caused by the lack of things that never existed against the benefits brought by things that do, it's probably impossible to do a quantitative analysis that is fair to both sides.
However, I and many others oppose patents on deontological grounds. That is, even if the existence of a patent monopoly produces some technological benefits as compared to a non-monopolistic system, we would choose freedom from monopoly.
John Carmack may have stated the essence of this position better than anyone since Jefferson [1]:
"The idea that I can be presented with a problem, set out to logically solve it with the tools at hand, and wind up with a program that could not be legally used because someone else followed the same logical steps some years ago and filed for a patent on it is horrifying." -- John Carmack
[1] "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." -- Thomas Jefferson
But here's the thing - while this is good, the Intellectual Ventures of the world are actually wining and dining congressional aides and maxing donations. The financial industry got that patent carve-out a couple months ago that only applied to their industry. Until tech people get into the game, full-court press in DC and get actual job creators and moneymen in front of congressmen telling them that this stuff destroys jobs, they're not going to be represented.
You're not obligated to go on a personal crusade on this, and it sounds like a big hellish pain in the ass that would be a net loss for you personally and for YC by entangling you in politics. But until someone does, people in favor of patent reform are going to be unilaterally disarmed.
Maybe some sort of industry lobbying group for small tech biz that's not beholden to the big corps would be effective. A small amount kicked in by some of the major angels/VCs, and a limited lobbying mission of "stuff that everyone can agree to" which would certainly include abusive patent use.
For me, at least, the experience has been the reverse: I used to think the patent system was basically sound with only a few problems, but the more I've read on the history of patents, the more I've realised how broken it is, and has been for a long time.
For example, in the 18th century James Watt used his patent to stymie development of high-pressure steam engines.
In the 19th century, there was costly patent litigation over barbed wire, which benefitted the economy not one jot. Nor did the sewing machine patent thicket and ensuing litigation benefit the consumer.
A patent is supposed to teach people how to make an invention. But in the 20th century, Frank Whittle wrote his patent application for the turbojet several years before he had actually made one. His patent couldn't teach people how to make a turbojet, because at the time of writing he didn't know himself! -- it took Whittle several years of hard engineering before he built a working jet engine.
But once established they definitely used patents against smaller competitors. So it is hard to say for sure even in this case whether patents were a net win. They probably were though. The patent probably caused modern separate-condenser steam engines to happen at least a few years earlier.
(I recommend the story of Bolton & Watt to present day founders. It is remarkable how little has changed.)
One reason is independent discovery: most innovations tend to be discovered independently and nearly simultaneously. Like, when "science is ready", innovations just pop out of several people's mind relatively quickly. (See also Eben Moglen's folk theory of the internet and innovation: "wrap the internet around a planet, spin the planet, and ideas flow out of the network".)
If we accept that, the only thing that could have significantly slowed the development of the modern separate-condenser steam engine down is money. Like, no single one investor is willing to risk making the first step, by fear of being eaten by copycats. If this is so, then we have a tragedy of the commons.
Risk aversion in this case is indeed a problem. I think it is mitigated however by (i) the first mover advantage, and (ii) variations of risk-aversion among individuals (combined with independent discovery, you get a winner-takes-all scenario).
Ah, before I forget: adopting an individualist point of view tend to favour patents: an inventor is entitled to reward (forgetting other's entitlement for freedom of invention). If I didn't have that patent, then I wouldn't have done this much good (forgetting that others may have done it otherwise). I know you didn't make this error, —Cf your §2—, but others do —for instance by taking your §1 out of context.)
[1]: http://www.dklevine.com/general/intellectual/against.htm
I think the key takeaway is that the patent was retroactively extended; so the idea was already created. If the extension was necessary for funding and development, then a case can be made for granting temporary monopolies for anything regardless of the inventor (the idea already exists, so we should find the best implementer) - I think most would be against this idea.
How far ultimately would you want to push it? I honestly don't know yet. Patents may have some utility. It's a very complicated question. I've read a lot about the history of technology, and I can't say for sure whether things would have gone better or worse without patents. The topic seems to be one of those where on average the strength of people's opinions is inversely proportional to how much they've studied the problem.