"Knock down the value of the largest homes and you cause a landslide of prices at all levels." 

Not true. The current real estate market is out of whack because the price of a house has little relationship to the value derived by using it as intended - by living in it. Anything that make house ownership more accessible to families and less accessible to investors is a step in the right direction.

Investors and speculators should not be allowed to participate in the incentive programs that were designed to promote home ownership.