I'm lucky in that I'm
   writing the serial port driver, so each serial port is gaining the
   ability to have its own concept of tty defaults.

If you do that, I will personally shoot you.  Having different drivers
interrupt the APIs differently is *extremely* bogus.      

   Also, I agree that it's dangerous for a program to assume a tty will be
   just as it needs it, but what do we do for programs which can't set
   tty settings right?

You fix the program.  In the case of lpd, in particular, this is quite
trivial.


Now, it has occured to me (and I believe I've even suggested) changing
`ttyflags' to allow specifying a full set of default control modes for
each tty.  That would seem to be a more general and more useful way of
solving the echo problem.