I agree that the article I cited wasn't the best one out there and was perhaps even a diversion from the real issues. How 'bout using the CRS Congressional Research Services:
http://www.fas.org/sgp/crs/nuke/RS22542.pdfand
http://www.fas.org/sgp/crs/nuke/RL34234.pdfWhat emerges for me, is, as you pointed out, that plutonium is not a viable dirty bomb source--there are much easier ways to create those from much less secure sources that plutonium. But what also clearly emerges is that it has been through reprocessing technologies that rogue states have been able to establish nuclear weapons programs, using the covers of a peaceful nuclear power program as their national sovereign right. Specifically, the exported reprocessing technologies of Pakistan were the direct sources for both North Korean and Iranian nuclear weapons initiatives. While the second article cited discusses the issue of trying to solve the problem of nuclear materials being diverted from nuclear power programs into nuclear weapons, it is not at all clear that countries on the verge are going to agree to the plans developed in GNEP. Some of the issues include skepticism by non-weapons countries of the weapons countries sincerity at actually eliminating weapons, which is a critical piece of the agreement.
After reading through all of these articles, it seems that two seemingly contradictory things seem true: 1) the Carter ban on reprocessing probably was an essential move that slowed nuclear proliferation; 2) the effectiveness of the reprocessing ban is ultimately ineffective. In other words, it has given the world time to grapple with developing strategies to slow/stop nuclear proliferation, but during that time, nuclear proliferation has occurred in dangerous ways. While there do seem to be ways to separate nuclear power from nuclear weapons proliferation threats, this clearly isn't happening yet and may never happen. And the primary vector for this proliferation has been by using plutonium, despite your protestations that it's not that much of a threat.
So unless there is widespread around the world of either denatured plutonium mixes and/or other nuclear power technologies that can separate the threat permanently, we are stuck between a rock and a hard place with no satisfactory solution in sight for how to handle nuclear waste.