Mark, I can see your point, but I disagree with two things:

First, you say:

"It's all too easy to say "screw Mozilla we'll use Iceweasel". Well, IMO that would be a weaselly thing to do. Mozilla and Firefox are enormous contributors to the digital commons and we owe it to them to figure out how to be supportive of what they are doing. There are limits to that debt, but we are well within those limits so far.
...
We continue to push towards an implementation that meets Mozilla's requirements and is smooth for our users. There have been some good suggestions here. We do have the option to move away from Firefox (as
you can see we have already invested in some of the work needed to have that alternative in abrowser). I am resolutely opposed to calling an unbranded firefox "Ubuntu Browser" (because we didn't write it)"

It seems, to my surprise, as if you don't realise what open source is about (of course, I'm not implying that you don't, this is definitely not an assault, just trying to make my point). If they wanted to have "rights" on their software they shouldn't have released it as open source. This is the logic behind proprietary software, which is fine, but firefox has reached its level of popularity (at least partially) thanks to the open source evangelists. I myself have turned at least 4-5 friends to firefox because it's open source. This means that, if some parts of it don't suit you, you have the right to change them. If an EULA is not what we want for ubuntu, then we have every right to take it away - and, fine, change the name and logo of the browser as well. This is NOT dishonest or ungrateful to Mozilla because "they wrote it", and definitely not "weaselly" (which is a kind of harsh comment on Debian's decision IMO). They knew and accepted losing that right when they released it as open source. It means they agree that we have the right to take the program, change anything and call it whatever we want. In a sense, isn't that what Ubuntu is doing with Debian? Sure, there are many patches written by ubuntu developers, but the main part is Debian. Still, you take this work, make your changes and call it Ubuntu. Which is GREAT, and that's the magic of open source software. You have EVERY right to call an unbranded firefox "Ubuntu Browser", since it will be, well, the browser of Ubuntu. Or just make up a name since you don't like IceWeasel.

Second, I think that Prateek Karandikar summed it up pretty well a couple of hours ago:

"There is an inherent contradiction here. Software in main is supposed to be free. Free to modify, distribute, etc. Ubuntu should be able to modify stuff in main, and then distribute their modifications. Modifications like... for example... getting rid of some annoying nag screen that appears at startup? If you believe that it's in main, then modify it and get rid of the unwanted dialog. Otherwise, put it in multiverse. Double standards are not acceptable."

If you are not free to modify firefox to exclude the EULA appearing on the first startup, then it's not really free software, is it? So, if you have decided that "* Ubuntu CDs contain only free software applications; we encourage you to use free and open source software, improve it and pass it on." doesn't represent you any more, I guess we should know. Unless you mean free as in beer when you talk about free software, which is another point that should be made clear.

All of this is written in good faith. I know you want to make Ubuntu as big as possible, but please consider the price you're paying. As the head of the leading linux distro, you have a very important role as to what the future of open source will be. Do you want it FREE as in free to modify and spread or with EULAs and all the legal crap we hate on windows and proprietary software? If you allow this, other projects will follow. Please make a stand for the whole open source community and show the world that this logic is not acceptable in GNU/Linux. You have the power to keep open source free or to make EULAs acceptable on a larger scale and contaminate the magic and morals of open source software, which is what made Ubuntu possible in the first place. Please make the right decision. Ubuntu will keep growing, with or without firefox. You don't to compromise Ubuntu's freedom just to have a recognizable piece of software. What will be next, a deal with Microsoft? I'm exaggerating, but what I mean is: you either draw the line between free and proprietary software, or you don't. Please sleep on it and decide wisely.