Thanks for your analysis. Even if this new equilibrium claimed by Eyal/Sirer doesn't hold up under scrutiny, haven't they at least succeeded in lowering the controlling percentage an individual would need to "cheat" the system in some way from 51% to 33%?

In the ES paper, and in your responses, the assumption is a colluding group of miners. I find myself agreeing with you there; it looks like the colluders have more incentive to break ranks. But suppose a single individual controlled 33%. Couldn't they use this same strategy to benefit more than we previously thought they could?