While I'm also disappointed in the lack of a 2.4 GHz downlink, I think the rational laid out in the latest AMSAT Journal presents a reasonable analysis of the situation.
The few weeks I was able to use my S Band equipment (K5GNA downconverter + 60 cm dish + K3TZ design patch feed) AO40 never rendered what I would refer to as an ear drum popping signal, the best I ever achieved was around an S5.
Now, let me provide the disclaimer that I am not an engineer nor rocket scientist, but assuming the 17db increased noise floor reference in the Eagle Update article is correct, and the general convention that receiver S units are about 5 db, I believe that the best case signal I would hear at my location would be around an S2. Now from experience I've found that the best case signal represents a only a small part of the total pass visibility.
I also believe that it would be impractical to increase the satellite's transmitter output to make up for the increased terrestrial noise floor, given the power generation and payload constraints of the proposed Eagle design.
Since we (speaking as an AMSAT member) build very capable satellites on a shoe string budget (compared to commercial operators) I feel that every opportunity to advance the communications and aerospace state of the art must be taken, in view of the fact that launch vehicle availability is extremely limited for non-professional organizations. To my mind, the design team are making the best engineering decisions they can.
73,
John AA2BN AMSAT 22683