I mostly agree with your post. As a financial planner by trade, I'd like to add to it.
In the proposals floating around to repeal the estate tax, there is at least one that suggests repealing the tax entirely but then not giving estates the step up in cost basis.
This has a set of interesting results, including paying no tax until an asset is sold. For instance, if your parents bought at&t stock at $10, and it's worth $20 when you inherit it, you pay no tax. But when you sell it, let's say at $25, you will pay capital gains tax on the difference between the sell price and the _original_ buy price. Estate tax right now gives a step up in the cost basis regardless of whether the tax limit (roughly $10million) is ever hit.
And just to cover the topic, there are two main reasons against the estate tax. The first is that the state has no right to that money. The second, thought, is much more problematic. If you inherit a business, valued at $20 million, you'd have to pay estate tax of roughly $5 million upon your inheritance. If you just owned the at&t stock I referred to above, no big deal - sell some, pay the tax, and walk away with your remaining $15 million.
But if you have a family business, the effects can kill the business. For instance, if your parents own a retail outlet or manufacturing facility, you can't easily sell part of it.
The US has never had an issue with permanent wealth like Europe has, even for the hundreds of years before the estate tax was put in place.