First of all, the paper is incorrect in some minor details; the most significant error is its (untrue) claim that we stop gathering entropy when the entropy estimate for a given entropy pool is "full". Before July 2012, we went into a trickle mode where we only took in 1 in 096 values. Since then, the main way that we gather entropy, which is via add_interrupt_randomness(), has no such limit. This means that we will continue to collect entropy even if the input pool is apparently "full".
This is critical, because secondly their hypothetical attacks presume certain input distributions which have an incorrect entropy estimate --- that is, either zero actual entropy but a high entropy estimate, or a high entropy, but a low entropy estimate. There has been no attempt by the paper's authors to determine whether the entropy gathered by Linux meets either of their hypothetical models, and in fact in the "Linux Pseudorandom Number Generator Revisited"[1], the analysis showed that our entropy estimator was actually pretty good, given the real-life inputs that we are able to obtain from an actual running Linux system.
[1] http://eprint.iacr.org/2012/251.pdf
The main thing which I am much more worried about is that on various embedded systems, which do not have a fine-grained clock, and which is reading from flash which has a much more deterministic timing for their operations, is that when userspace tries to generate long-term public keys immediately after the machine is taken out of the box and plugged in, that there isn't a sufficient amount of entropy, and since most userspace applications use /dev/urandom since they don't want to block, that they end up with keys that aren't very random. We had some really serious problems with this, which was written up in the "Mining Your Ps and Qs: Detection of Widespread Weak Keys in Network Devices"[2] paper, and the changes made in July 2012 were specifically designed to address these worries.
[2] https://www.factorable.net/paper.html
However, it may be that on certain systems, in particular ARM and MIPS based systems, where a long-term public key is generated very shortly after the first power-on, that there's enough randomness that the techniques used in [2] would not find any problems, but that might be not enough randomness to prevent our friends in Fort Meade from being able to brute force guess the possible public-private key pairs.
Speaking more generally, I'm a bit dubious about academic analysis which are primarily worried about recovering from the exposure of the state of the random pool. In practice, if the bad guy can grab the state of random pool, they probably have enough privileged access that they can do much more entertaining things, such as grabbing the user's passphrase or just grabbing their long-term private key. Trying to preserve the amount of entropy in the pool, and making sure that we can extract as much uncertainty from the system as possible, are much higher priority things to worry about.
That's not to say that I might not make changes to /dev/random in reaction to academic analysis; I've made changes in reaction to [2], and I have changes queued for the next major kernel release up to make some changes to address concerns raised in [1]. However, protection against artificially constructed attacks is not the only thing which I am worried about. Things like making sure we have adequate entropy collection on all platforms, especially embedded ones, and adding some conservatism just in case SHA isn't a perfect random function are some of the other things which I am trying to balance as we make changes to /dev/random.