Very good, although I have heard similar arguments (though less elaborated) in conversation. The principle of charity (or steelmanning - never heard that term before) certainly is important, but sometimes it just goes too far. At one seminar I used to attend the seminar leader used to "re-interpret" the most confused and illogical argument, saying - "did you mean so and so", to which the interpretee of course invariably gratefully responded yes (though of course he never in his life had come up with such an interesting argument). The whole thing was a bit of a comedy...the problem was, though, that most people didn't see what was happening (including both the re-interpreter and the re-interpretee), so people got a false impression the re-interpretee was much less confused than he really was.
One wonders if incidents like these contribute to the false impression that academic abilities are roughly equal, something that I discuss here: http://lesswrong.com/lw/jhy/division_of_cognitive_labour_in_accordance_with/
Another thing that's seldom pointed out is that we should use the principle of charity selectively. Some people have a strong track-record for saying interesting things, so if there is something they've said that we think is confused, wicked or false, we should take another look at it and see if we can make more sense of it. Other people have a very poor track-record, and with them it is rather the other way around: confused, wicked and/or false claims is the normal, and we should rather take another look at our interpretation if it tells us they've said something deep and interesting.
As far as I can tell, most people around these parts consider the principle of charity and its super saiyan form, steelmanning, to be Very Good Rationalist Virtues. I basically agree and I in fact operate under these principles more or less automatically now. HOWEVER, no matter how good the rule is, there are always exceptions, which I have found myself increasingly concerned about.
This blog post that I found in the responses to Yvain's anti-reactionary FAQ argues that even though the ancient Romans had welfare, this policy was motivated not for concern for the poor or for a desire for equality like our modern welfare policies, but instead "the Roman dole was wrapped up in discourses about a) the might and wealth of Rome and b) goddess worship... The dole was there because it made the emperor more popular and demonstrated the wealth of Rome to the people. What’s more, the dole was personified as Annona, a goddess to be worshiped and thanked."
So let's assume this guy is right, and imagine that an ancient Roman travels through time to the present day. He reads an article by some progressive arguing (using the rationale one would typically use) that Obama should increase unemployment benefits. "This makes no sense," the Roman thinks to himself. "Why would you give money to someone who doesn't work for it? Why would you reward lack of virtue? Also, what's this about equality? Isn't it right that an upper class exists to rule over a lower class?" Etc.
But fortunately, between when he hopped out of the time machine and when he found this article, a rationalist found him and explained to him steelmanning and the principle of charity. "Ah, yes," he thinks. "Now I remember what the rationalist said. I was not being so charitable. I now realize that this position kind of makes sense, if you read between the lines. Giving more unemployment benefits would, now that I think about it, demonstrate the power of America to the people, and certainly Annona would approve. I don't know why whoever wrote this article didn't just come out and say that, though. Maybe they were confused".
Hopefully you can see what I'm getting at. When you regularly use the principle of charity and steelmanning, you run the risk of:
1. Sticking rigidly to a certain worldview/paradigm/established belief set, even as you find yourself willing to consider more and more concrete propositions. The Roman would have done better to really read what the modern progressive's logic was, think about it, and try to see where he was coming from than to automatically filter it through his own worldview. If he consistently does this he will never find himself considering alternative ways of seeing the world that might be better.
2. Falsely developing the sense that your worldview/paradigm/established belief set is more popular than it is. Pretty much no one today holds the same values that an ancient Roman does, but if the Roman goes around being charitable all the time then he will probably see his own beliefs reflected back at him a fair amount.
3. Taking arguments more seriously than you possibly should. I feel like I see all the time on rationalist communities people say stuff like "this argument by A sort of makes sense, you just need to frame it in objective, consequentialist terms like blah blah blah blah blah" and then follow with what looks to me like a completely original thought that I've never seen before. But why didn't A just frame her argument in objective, consequentialist terms? Do we assume that what she wrote was sort of a telephone-game approximation of what was originally a highly logical consequentialist argument? If so where can I find that argument? And if not, why are we assuming that A is a crypto-consequentialist when she probably isn't? And if we're sure that objective, consequentialist logic is The Way To Go, then shouldn't we be very skeptical of arguments that seem like their basis is in some other reasoning system entirely?
4. Just having a poor model of people's beliefs in general, which could lead to problems.
Hopefully this made sense, and I'm sorry if this is something that's been pointed out before.