You cite potential technical hurdles. If the technical hurdles can't be solved, then maybe we should leave the system as-is, but if they can be solved, maybe we should change it.
Selfish is defined as showing or arising from an excessive concern with oneself and a lack of concern for others.
If one person makes the experience a lot worse for several other people for a slight personal benefit, does that not meet the definition of selfishness?
Is it not more selfish for that one person to significantly worsen the TMM experience for many others than for those many others to want that person to be limited to select TMM queues and custom games?
I understand that you personally have not been experiencing much lag in TMM games, but you presumably get matched with higher rated players in general, who seem less likely to play games where they lag a lot on average. I believe this problem is more pronounced at lower ratings, as I have noticed disproportionately more lag in lower-rated games compared to higher-rated games on average. Either way, there are players who consistently lag a lot and significantly worsen the TMM experience for others, sometimes resulting in numerous people leaving the TMM queues or dealing with bad TMM experiences due to the lag.
I'm not suggesting limitations be applied to all queues, but it seems like there should be at least some queues with some minimum requirements if the technical side of that can be handled reasonably enough.
Regarding how to handle the technical limitations, why not use the new metric that has been created for calculating players' lagginess across games? Even if people can find workarounds to spoof their scores, I imagine the vast majority of the severe laggers won't do that, and the ones who do could be moderated against. That would presumably require a lower level of moderation than if we moderated as you suggested but didn't use the new metric to filter out most of the severe laggers.
Alternatively, perhaps a system could be created that takes the extant in-game measurements for lagginess (for both connection and sim speed) and logs roughly how much each player contributes to lag in each game, and then have that data automatically reported back to the server at the end of each game.
Altenratively or additionally, perhaps stuff related to ICE could be utilized in some way to provide some additional data on which combinations of players are too likely to lag too much and or who tends to lag a lot from a connectivity perspective.
Also, as a side note, I think a lot of the severe laggers are not intentionally trying to ruin the games with their lag, but just trying to play. So, the rule you quoted doesn't seem like it would apply to most of them anyway... perhaps the rules could be changed to address this issue though...