And if the line break after the /ref tag adds a space it's no problem since that's usually intended anyway.
Uhhh, no. This is a very very very bad assumption. At least 80% of my refs do NOT appear in a place where a break is appropriate.
I don't like this idea much, it seems likely to make the references a lot more "fragile" than they currently are.
I can't imagine a LESS stable system than the one we have currently! One missplaced char in the tags and the rest of the article disappears!
There's a basic rule here that is best known in the computer industry: longer code contains more errors. By separating the ref "markers" from the ref "body" the main article text becomes smaller and easier to read. This will lead to LESS errors with refs. It will also mean that cutting and pasting will not lead to the sorts of errors we see today where someone moves a para containing a placeholder to an earlier ref and the entire ref system stops working again.
If you've referenced a large block of text this way then one could easily wind up cutting and pasting chunks that might break the citations, and it goes back to the {{ref}} template's old problem of having to change two separate sections of the article when adding or removing a reference.
This is a valid concern, but was the problem worse than the terrible mess we have now?
I like the current system because it's so "atomic"; a reference's text lives in just one location
I'm not sure this is any different. If I use one ref in a couple of places in my article (quite common) then you end up with one body text and several pointers to it. The only different here is that ALL body text would be pointers -- as an option, of course.
It seems to me the only reason this doesn't work now is because the original ref body must appear before all references to it. If this were changed one could do refs any way they want, as well as fixing the problem with editing.
Maury