Hitting the carriage return key on a keyboard should give the user a new line in the output. This is simply typographical common sense. What probably confused this user (or he chose to ignore) was the fact that doesn’t happen with this markup.
A markup should not break elementary common sense rules in order to provide other elevated functionality.
The fact users use two carriage returns to create paragraphs in other places (like in this box) is irrelevant. The markup internal rules have stipulated that his text formatting broke because the lack of two carriage returns. That’s fair enough. But his text would also have become easier to read if instead of a new paragraph, every carriage return introduced a line break on the resulting text. And that you cannot deny either, Jeff.
Take a look at the user edit box. Is there anything in there that is not clear in terms of formatting? He doesn’t use carriage returns and yet his line-break formatting style makes that particular text easy to read and appealing to the eye. The markup however made a mess of it. So, the markup actively ruined the user text. This cannot be.
For the sake of some special formatting elements, like list detection the markup aggressively demands two carriage returns to break a line. Meanwhile it doesn’t accept the idea of a new-line break, unless the user explicitly forces it with the tag.
The line that divides easy-of-use and formatting tyranny can be very thin.