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MWI was thinking of posting something on this topic previously but I no longer thought it was relevant once the thread died.
I agree with SGC's analysis of Dan's cards as "counterfeit". To me, a counterfeit card isn't just one that is laser copied and pasted to a piece of card board. I believe the word "counterfeit" can also refer to a scrap of paper that was never meant to be collected or traded as a baseball card. In this way, the word counterfeit should not be limited to that which is merely "reprinted" or "fake" or "fraudulent". I think it can also mean that which would be deceptive -- seen as a legitimate baseball card -- if professionally graded and encapsulated. In my mind and using a definition that is very much within the bounds of reason, there is no question that Dan's cards were "counterfeit" in the sense that they were not legitimate or authentic baseball cards.
Could SGC have come up with a better word to describe what Dan submitted? Sure. But I don't think the word "counterfeit" is unsuitable or problematic when seen from a context of what is a real baseball card and what is not.