Crash: We do seem to agree on some things (definition of CAA for one) but I still believe you're missing the point. Lets stop calling it 'Military Exemptions' and I know I've used that phrase once or twice myself. How about Military Accreditation which is truer to what the CAA/JAA have done.
All that has happened is that 'adequately experienced pilots' have had the years of training in the military recognised. (I won't enter the debate on yearly flying and knowledge checks, that has been done sufficiently)
And while you bring up the point why not allow FAA/JAA/CAA cross recognition of ATPL/CPL etc etc? Go for a unified license, people already go to the sunnier and cheaper climes of the US of A to hours build.
To repeat it's accreditation not exemption.