Great post and thumb-up to SED.
Let me add one economic concept on SED. In the market system, social contract and perception about the peg is excluded, and therefore effects from the peg can be considered as externalities. Theoretically, the best point of discount is actually maximize social welfare with the consideration of this externality.
That is, if removing a marginal deviation of peg (say, from 0.99 to 1.00) requires much greater costs than benefits, e.g. people don't care this amount of deviation so there is almost no gain, we'd rather allow little broken peg and save the cost.