Part of the issue with retweets is that the whole network will become more noisy and people will have to get used to that, I think this is partly a mistake. It could be fixed by allowing users to favorite cool things and retweet things they REALLY wanted to surface.
Come to think of it, I could make that in a few hours...
Favorites - Click a button on a tweet and it goes into a list of tweets on your account
Retweet - Click a button on a tweet and it goes into a list of tweets on your account AND it shows up on your followers' timelines AND you get stats about how many other people retweeted it AND you get notified when your tweets are retweeted AND you can view just the retweets of your friends.
Retweets, as Twitter has implemented them, are just favorites upgraded. I think a lot of the controversy would go away if they hadn't co-opted a term from their users and ended up using it in a very different way than it had been defined.
An idea to avoid the commenting controversy: Allow an @reply following a retweet to show in your followers' timelines, even if they don't follow that user. Since Twitter won't show you @replies by your friends to users you don't follow yourself, that would be a good way to expose those discussions in a relevant way. UI-wise, there could be a small "comments" box that opens up when retweeting that just posts this @reply as a status update. Best of all, no API changes or backwards compatibility hacks.
The main advantage, by far, of this retweet implementation, is that twitter controls everything. The value of the retweet data is astounding. It might make their service viable - compared to the tyranny of chronological views of everyone that could be their downfall.
We need to find good content, and bubble it up. You can't just have realtime to do realtime search. You need content. Currently, twitter has an extremely poor estimate of what is good.
Let me take this opportunity to also gripe that favorites should be MUCH more prominent. They need to incentivize them by showing a count or usernames next to each tweet. And let me reorder tweets based on their being marked a favorite.