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I think the process as it is set up should prevent the "paper MCSE" syndrome and insure the certification maintains a professional level standing and industry respect.
Yes and no. Now you just need 3-4 years experience as an administrator, not necessary specifically directed towards security administrator (one would assume that one would have security on the mind as an admin but I think we know that this isn't always the case). I think this is the biggest concern I would have in regards to it becoming the "next MCSE".