Mostly, I think that would produce an ugly API.

The reason I've been leaning towards that solution is that it assigns the responsibility of locating any other resource, in one request, with full backwards compatibility, to exactly one location, freeing other locations to change in a more fluid and graceful way without the cruft.

Edit: Oh and because other URLs can have the context of their parent paths deliver some value or information. But then again URLs should be opaque =). Definitely worth thinking more about!

I don't see why the API would have to be ugly. The examples of "bookmark" link URLs given in the article are perhaps ugly (using query strings, etc.), but there's no reason why such URLs couldn't be "nice" ones. The article talks about things like "what if I want a URL structure like /User/projects/5 instead of /projects/5?", but that's a red herring: you could just as easily say "what if I want a bookmark query string that looks like ?user=User&project=5 instead of ?project=5?".

The bottom line is that as soon as you have a public API, you have identifiers that can't be easily changed because people need to be able to bookmark them; and those identifiers can't be too ugly because they are visible to users. So they should work OK as API URLs.