I'm not sure that the issue has been fleshed out sufficiently for you to make that statement. 2006 tax returns (the first year for the new rules) are just going out and until there is a consensus of opinion by the IRS as to how exactly they are going to interpret the "convenience" issue it's up for grabs. There appears to already be some backpedaling as the IRS has shown a willingness to adjust the $11,500 housing exclusion for high cost areas.
I agree, an argument can be made that housing provided to us
IS for the convenience of the employer as we couldn't afford to live in our particular city otherwise. I wouldn't, however, bank on that argument being accepted by the IRS. If you took the cash option then it would be even more difficult to make an argument that it is provided for the convenience of the employer.
TP