WWW:
Not sure I follow your argument about military use of airspace. While I appreciate the large overwater areas tied up in naval ranges to consume a lot of airspace, I don't think it's really the place most light aircraft want to go flying over, so releasing this airspace is unlikely to improve GA congestion.
As I'm sure you're aware, most of the airspace in a MATZ (all but the ATZ) is not technically controlled airspace for civil aircraft. Only a buffoon wouldn't call the military controller, who will almost always give a zone transit (knowing as they do you have every right to blast through anyway). They will appreciate knowing who you are, and the opportunity to verify your Mode C. In addition, at the peak periods for GA traffic - weekends, most MATZs aren't active.
As one last point, it's also worth mentioning that most military operators are punctilious about making courtesy calls to small commercial fields they transit near, and probably have a much better lookout scan, thanks to relatively good fields of view (compared with an airliner at least), and a traning system that places a huge value on lookout, the skill that will keep those operators alive in wartime as well as peacetime.
QDM:
While a controller can indeed see your 7000C squawk, as previously mentioned the Mode C cannot be trusted unless verified. Mainly though, if you're not talking to them they have absoloutely no way of knowing if you are likely to suddenly change heading or level, so much larger separation minima must be applied than for known traffic.
Overall, I think many of us are missing the point here - the original post was trying to point out how good airmanship from the GA community can help reduce the restrictions, in the form of increased CAS, imposed on us. Surely everyone can appreciate the value in making such courtesy calls?