You were claiming that MEPIS could just invoke part 3(c) of the GPL. You were wrong. Will you acknowledge the mistake?
I'm also puzzled by your claim that "the FUD struck." Your comments there seem to be directed at lots of people, none of whom are me.
As for the "spirit" of the GPL, the spirit of the GPL is that it is up to the distributer to make it as easy as possible for the recipient to get source. The only concession that is made to make this obligation easier on the distributer only applies if your distribution is non-commercial and you are distributing binaries that that you got elsewhere with an offer of source code.
In fact the FSF tries to interpret this part of the GPL even less generously than I do. Their FAQ would have you believe that you have to be willing to ship source code on physical media. Every other interpretation that I've seen (including mine) is that it is sufficient to just throw the code up on an FTP site. And, of course, maintaining an FTP site really isn't a very onerous task.