This story is so Asimovian that I keep waiting for "violence is the last refuge of the incompetent" to pop up.
Manon: I hesitate to post this because it's such an emotional piece, but Eliezer has already written an impassioned response to your question. http://yudkowsky.net/other/yehuda
Is this a different story from the one that was supposed to make us go insane?
Cory Doctorow's Down and Out in the Magic Kingdom is a pretty good utopia. Also, I would happily live in the extreme post-singularity of complete AI control off all matter and energy from The Metamorphosis of Prime Intellect.
Doctorow's Utopia has few drawbacks that don't exist in modern society, and Metamorphosis is an issue of what friendly AI means. Eliezer, you'd probably like Metamorphosis if you haven't read it -- it's about an obscenely strong AI programmed to follow Asimov's three laws. It touches on a number of issues that you write about here, like orgasmium.
Both are available for free online, Doctorow's under a CC license and localroger's free as in beer.
This post needs more explosions.