I would say that the primary reason why SD feeds have not been removed, is due to the number of SD-only receivers still in use on western arc, and old Dish 500 setups. I don't think there were any MPEG-4 SD-only receivers, so in theory, you could cut the SD channels from eastern arc, but it's a smaller gain compared to cutting them from WA, and it would make the two arcs inconsistent with each other.
As far as viewing HD channels on an SD set - I have no problem with this on my 922. My main TV is a fairly nice 42"1080p in the living room, and I run a coax to the bedroom, where I have a 32" JVC CRT that was a top of the line SD set in 2002. The 922 allows me to center-cut the HD program and make full use of the screen - or I can use the 16:9 squeeze mode on the JVC, which actually causes the scan lines to be drawn closer together. On this SD TV, I can see virtually zero compression artifacts when watching HD programming.
Because both of the down conversion options work so well, I deleted all of the SD channels from my favorites list. Now that I have had to put some back, I am watching some of the old MPEG-2 streams again. They are definitely worse than down converted HD. The compression artifacts appear more like sharp blocks on the SD, and the whole image just looks soft and generally poor on the HD. Houston HD locals are on both arcs, I guess - since it's pretty much in the middle of the country, and I self-installed, so I chose WA since the satellite dish was on sale at the time.