He charges that "PD situations are highly contrived and ignore many real-world facts that are morally relevant..."
Well, yes. The analysis of a simple game is not the analysis of a complex game. Game theory is a rich and varied field with volumes of serious academic work. As a philosopher, though, I'm entitled to look at how the essential features of some simple games illuminate our fundamental understanding of ethics.
Alonzo might as well argue against the "oversimplification" of gravitation. It is certainly the case that just m1*m2 / d2 ignores many complications in actually describing the motions of planets. But without a sound fundamental understanding of various ideal cases, we can't get very far in making sense of complex phenomena.
The specific cases Alonzo gives, "variable pay-offs, the possibility of anonymous defection, the possibility of deception, and the possibility of affecting desires," all (except perhaps the last, which I shall address in a moment) easily handled by more complicated game-theoretical analysis. But these more complicated analyses don't change anything about the fundamental way we interpret game theoretic analysis in an ethical sense.
He asks, "What happens if we raise our children so that they simply acquire a desire for cooperation or an aversion to defection?"
That seems like an overly simplistic strategy, leading to a susceptibility to exploitation. More importantly, even if children were infinitely labile (which they're not) it begs the question: why should we raise our children thus? Why is cooperation better than defection?
Should we not give our children a sound theoretical understanding of what's going on, so they can analyze and respond to complicated situations where simplistic strategies will not suffice?
To a certain extent, as Alonzo mentioned earlier, we can indeed change desires, to a certain extent. But which desires should we change? Why? How can we justify making those changes? These are all questions that game theory and meta-game theory attempt to answer in a consistent manner.
His next objection,
If we look at your original account from Wednesday's post, and raise children so they assign 2 units of value to cooperation itself, then the value of cooperation increases from 3.3 to 5.3,and exceeds the value of defection. We solve the same problem without any of the complexities of game theory.is difficult to understand. Alonzo has to use game theory to perform this analysis and reach the conclusion that we should change the game by raising children in a particular way. He has employed game theory, not avoided it.