what do you mean by 'degraded manner' for the network as a whole?
other than a lower availability of these spam transactions in any given set of nodes' mempool, it makes little no difference for a node that is enforcing existing policy which is the network at large. it would only be degraded for the participants that want higher availability of arbitrary data prior to the spam transaction getting mined which is even a smaller set of people than the people who actibely upgrade software and/or apply patches.
the argument i see being made is that fee estimation could be messed up, but the thing is that fees are up to the node. their ability to calculate fees on their own criterion of what to bid against is none of anyone's business and certainly doesnt degrade the rest of the network. the node knows whats best, assumptions on what a miner "might" include in blocks dont need to (and shouldn't) be forced upon them.
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Not having transactions in the mempool that are being mined into a block degrades compact block resolution. This leads to slower block relay and a quadratic increase in p2p traffic. If you don't accept data carrying transactions that your peers send to you, you create a negative externality for them if they are mined, because they need to relay them to you again.
arent nodes running filters to impede this propagation as a way to marginally discourage behavior of relaying transactions not accepted by the wider network? thats the entire point, it works. why wouldnt expanding those filters to include utxo-bloat spam work also?
when a peer is relaying a bunch of spam to my node, my node basically treats that peer like a block relay. not my business that he sends those txs to me multiple times and not his business i refuse to forward along transactions. in the event where multiple chaintips appear, I'd prefer to relay that the block with more of the transactions ive already validated in memory over the one where theres transactions my node hasnt validated
