Chad, you were wrong in your question about the MLS franchises, and you're wrong here too. I have been saying the exact same thing for months here, and Steve Morrow has got it right. Moreover, I think he's in a much better position to judge than most.
What I have said is that the better MLS clubs would probably perform in the lower half of the EPL. Morrow said "I genuinely believe we are at the stage now where the top sides could survive in the English Premiership", which sounds like very much the same thing and is not exactly "competing" I suppose. David Beckham has also been defending the league against criticisms of poor quality play. Again, he is in a position of authority on the subject.
The problem is that most Europeans' exposure to MLS is likely through the 2007 Galaxy, who were not good, with or without Beckham. Extrapolating that the entire league is bad from that kind of knowledge is suspect logic. Moreover, Europeans tend to have an inflated opinion of the quality of their own leagues, especially the EPL. I see many of the same errors committed in the EPL as I do in MLS, and the EPL's mad rush style of play is crass, frankly. It lacks finesse and can be extremely boring. It also explains why England is becoming less and less competitive internationally.
Another error you make is to assume that 130 years of tradition make for a better league now than 15 (actually 2008 is the 13th season, although the league was founded in 1994). Looked at another way, the EPL is only a few years older than MLS, and MLS has a soccer tradition here in the US that goes way back, even beyond 1950. It also assumes that the 130 years were all good. They weren't, not by a long shot, despite what the FA told itself for decades. Besides, with international players all over the league, the MLS has the traditions of many soccer-playing countries to draw on anyway.
Next, you dismiss MLS wins against European teams because they were playing teams in pre-season mode, but criticize MLS for losing in CONCACAF tournaments, ignoring the fact that the MLS teams were in pre-season/early season mode themselves. That is an unjustifiable double standard.