I'll add my thoughts regarding the question, "why should we think that ethics shouldn't be scope insensitive?" separately:

"Circular Altriusm" suggests that we shouldn't expect that ethical intuition is scope sensitive. But should we expect that ethics is scope sensitive?

I think that 'multiplication' might be good -- and pragmatically required -- for deciding what we should do. However, this doesn't guarantee that it is "ethical" to do so (this distinction only coherent for some subset of definitions of ethical, obviously). Ethics might require that you "never compromise", in which case ethics would just provide an ideal, unobtainable arrow for how the world should be, and then it is up to us to decide how to pragmatically get the world there, or closer to there.