I think many people are posting some solid points. Here is my take on this discussion at this point, with a possible resolution.
I think that Retillion makes some fine points. The first being that Diplomacy was not designed in reference to a points system. The "winner" is the one with the majority of centers, representing the strongest power in Europe. The rules do not mention survival in regards to having a value, but it also does not state that survival is worth nothing. I would consider that for many, being allied to (or even subject to) the strongest European power is a much better outcome than being totally defeated by them. I know that in a real life scenario this would be true for most peoples, because even if up against a hostile power, they would still have a chance to hold out their resistance, waiting for an internal collapse or power struggle. It is easy in many situations to perform a stalemate with far fewer than 17 sc's. This being the case, surviving may be considered a superior outcome (and perhaps worth more) than being defeated. Also, never in the rules does it state that weaker powers MUST work together to prevent a solo. Yes, it seems to follow naturally that this should be the goal, because a draw is the only other way to "share" victory; however, no one could possibly make a concrete argument that a player not doing his absolute best to stop a solo is against the rules. Maybe it is against the spirit of the game, but NOT AGAINST THE RULES. Also, one edition of the rules states that players may 'negotiate alliances to his own advantages'. If surviving suits a player, then what's to stop him from seeking that objective? I will also say that these are all cases where diplomacy can make the difference. Using good diplomacy to spur a strong resistance, or using poor diplomacy to cause a player to throw a solo simply out of spite are both very plausible outcomes. Diplomacy is still the key ingredient.
However, the rules do clearly state from the beginning that the ultimate goal is to win, by eventually standing alone. This asserts that everyone playing should be playing to win (individually), or to prevent anyone else from winning, because a draw is the only other outcome listed in the rules. This is why I agree that a WTA-style setting does the most justice to the game, because it best facilitates that style of gameplay.
I think the point system on this site is a good idea, because it gives players the opportunity to earn more, then bet more, which gets them into better or more challenging games. Where the points interfere with the gameplay is when a strong surviving player can gain a substantial amount of points, win or lose. In that case, a player might allow someone else to win as long as they keep their earned points. But a player would not normally do this in a game where points did not exist, so I agree that PPSC can contribute to a flawed interpretation of the objective.
In short, I don't think that either the WTA or PPSC setting is perfect, because WTA posits that the winner has assumed all the supply centers when in fact he hasn't, and PPSC for the reasons listed above. If it were up to me, I think the best points setting would be only one setting, where the winning player gets all of the points for all of his supply centers, and the surviving players receive points for their supply centers but only to a maximum of their original buy-in. This gives players some small incentive to survive, but prevents players from actually profiting from surviving a solo, and the only way to win points is to win or draw.