The problem with the wtfpps system is it operates under the false assumption of an infinite mining contract.
What if I mine on a wtfpps system for one full block of 30 minutes and receive a fraction of the normal proportional equivalent, then end the mining contract?
Doesn't the pool keep that unpaid difference (proportional expected - wtfpps rewarded)?
Simple example - The entire bitcoin network uses wtfpps for 5minutes, finds a block, then quits to go back to keeping their full earnings each round. Payout is maybe 25btc (or less in faster finds) and unpaid of 25btc. This extra 25 btc will be spent by the pool eventually won't it? Or you keep it in reserve ad infinitum in hopes of the whole bitcoin network giving you more work?
Am I missing something for the single block miner in this case?
Sure, you're missing something because you are only looking at the downside.
1) Miner X mines for exactly one round in a SMPPS pool. Lets say the pool has a lucky round, Miner X gets 5 BTC (his actual expected earnings on average), while he would have gotten 10 BTC if the pool was set to proportional. The extra 5 BTC goes to the buffer.
2) Miner X mines for exactly one round in a SMPPS pool. Lets say the pool had an unlucky round, Miner X gets 15 BTC (because he had to mine for longer), while he would have gotten 10 BTC if the pool was set to proportional. This extra 5 BTC came from the buffer. (If there is a negative buffer, Miner X will get paid when the pool has a short round, even if he stops mining.)
So, you are talking about scenario 1. Sure, if the miner never comes back, he won't see any of that extra 5 BTC. However, he still got paid his expected earnings per share. He didn't lose any expected value by mining in the pool. However, in scenario 2 the miner got paid an extra 5 BTC that he wouldn't have in a prop pool. He got paid his expected value though, just like scenario 1.
Therefore, the goal of the system is achieved. Everyone is working together to reduce variation in payouts (which is the goal of any mining pool.)
It is not a perfect system. Luck can still play a role in whether or not the buffer is positive or negative. Over time, it should average out to 0. The actual "perfect" system would be if you could mine and get your expected BTC per share instantaneously, but sadly this is not possible, we do the best we can.
As has been obviously demonstrated in the OP, the proportional system is not perfect either. Would you like to have your earnings reduced by 12% because someone else is pool hopping while you are not? I don't think so. Yes, there are other methods to combat pool hopping, SMPPS is just one option. Pool-hoppers were very obvious on ArsBitcoin, and I did not like the idea that the normal miners were losing out. Therefore I implemented what I think is a fair system as fast as I could.
So, yes, SMPPS has pros and cons, Proportional has pros and cons. However, SMPPS is not some 'wtfpps scam' which seems to be what you like to claim.