Can horseshoe crabs actually feel pain? I thought their nervious systems were too simple for that, ergo there's practically no ethical concerns with doing whatever you want to them, as long as it doesn't lead to genocide.
* Environmental - Are we diminishing the horseshoe crab population in a way that'll adversely affect the environment?
* Sustainability - Will our current methods be able to supply indefinitely increasing demand for horseshoe crab blood?
* Practicality - Are we using a natural resource as a way to avoid a more responsible or practical engineered solution (compare: whale oil)?
I don't claim a satisfactory answer to any of these (I just don't know enough about horseshoe crabs), but a "yes" for any of them represents a plausible ethical concern.
I don't think we have any workable theory at this point that would explain how exactly (biological) neural networks produce pain, or predict how complex they need to be to do so.
It's an odd line to draw, but that's apparently the line: whether or not there's a spine.