It's not great, but I can't see it as a huge obstacle.
I might be misunderstanding, but until a piece is fully received, you can't hash it and check it is right. This could therefore lead to many clients having partially incorrect pieces, if they keep passing it around.
I've found (and I'm not 100% sure why) that most bittorrent clients do find they get some number of dodgy pieces over time, so this isn't just a theoretical problem.
Re: Aggressive sharing. Yes and no. If the torrent is encoded as a Merkle tree, you can verify subsets of a piece. For torrents that only include piece-level hashes, a BitMate client can upload an unverified piece. However, in our experience, its rare for pieces to be corrupted (unless the uploader is maliciously uploading corrupt pieces).
Please let us have your feedback regarding the performance and stability of the client since this our first (read: pre-alpha) release.
This is my concern too. The rest of it seems mostly compatible with BitTorrent (although I am a little concerned at there being multiple mechanisms by which this peer algorithm prefers itself, in this particular use case that behaviour seems justified and fair), but this is not playing nice.
One reason you receive incorrect pieces by the way is from people that have altered the files on their hard drive but still have their BitTorrent client running - a common case is MP3 player software rewriting the ID3 metadata, which WMP and iTunes do without asking.
I'm on horrible hotel wifi or find myself a late seeder next to massive seed boxes on whatever tracker I'm on. This would give a good bump in the ratio the new guys and even things out if it works in theory.
In fact I'd love to do that as well, given the chance.
EDIT: Just found out that it's open source, details here: http://sourceforge.net/projects/bitmate/develop