I doubt self signed certs without some kind of notification will work, in fact would leave us more open to government MitM then under a CA model, I can not see any way to defend against that kind of attack unless you know the person in person and swap fingerprints.
I don't know what you mean with "notification".
How can you pull a man-in-the-middle attack, if the browser warns you about (or prevents) *changed* certificates (as described)?
The initial connection definitely not that serious, but not a problem for many cases in practice. You probably have been at your bank's site before, so you do know their certificate. If then a malicious site wants to pretent to be your bank, it can't (any more than with current SSL), because the browser notices the certificate change.
If I get to know a person on the internet, it doesn't matter to me that her real name is indeed "Mary Franklin", but that I am always talking to the *same* person.
Yes the security model for SSL is flawed but self-signed isn't the answer for large scale use either
Maybe not. But it has its uses and should not be prevented or discouraged by the software, as it currently is.
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