Clothes: they do have a use, the cloth rot is just a problem that no one wants to deal with currently because a dwarf just layers more clothes on (it does provide a minimal amount of [DAMBLOCk] too).
They aren't useful at the moment, dwarves are just as happy naked. So just trading fodder.
Crafts: trade fuel, way to get rid of excess stone, happy thoughts, unfinished development
The same can be said for any item: trade fuel, way to get rid of extra resources, and I agree: unfinished development. I don't see actually what's different about the unfinished development of crafts and clothes vs. the unfinished development of the nutrient cycle or other byproducts.
Pig Iron: I'm ambivalent on this one. Sure steel could have been reactioned differently, but it's been like this forever (i.e. before reactions.txt).
No reason to keep it, if it's bad; but it's good, because it gives flavor to the process of steel-making.
large gems: never had one, no ideasalve/venom/soap: unfinished development. All of these items have intended uses that haven't been coded yet, you can't include them as "waste products."
(If you cut gems, you get large gems sometimes.) Uncoded is uncoded, whether originally intended or added a minute ago; The goals and bloats of the game are frequently added to and reorganized.
Not every map has a chasm or a volcano. I actually go out of my way to get one or the other so I don't have to deal with the piles and piles of existing refuse, I don't need another.
As soon as goblins raiding parties aren't conjured up out of thin air anymore, the refuse stream will noticeably diminish.
There is no such thing as bio waste, it's just not being tracked yet.
THAT'S EXACTLY MY POINT!
It isn't tracked, shouldn't be tracked, and Toady has stated it will never be tracked. In my opinion, gravel is just as much unfun as biowaste.
Tracking every twig, leaf and dog turd was never implied. Keeping track of the nutrients going in and out of the farmed soil for example can add the necessary challenge to farming. A few localized sources can already provide enough variation and flexibility to give the player different options (eg. ash (already in), river deposits (already in), stable manure (could fit),..).
I'm usually having trouble selling all clothes, crafts, totems etc. Does that mean all trade goods are useless and shouldn't be tracked? No; it just means that resources and consumption aren't balanced yet, in this case craft production and trade.
The infamous excess stone problem is the same: transport is by far not as efficient as production. I think the time required to mine a cube of rock should be roughly the same as the time required to take the resultant pile of rock and cart it away to whatever destination it has, be it the local chasm, the mason's stockpile or the steadily growing pile of excess rock outside. Slowing down mining will not be popular - so mostly hauling has to go faster. Luckily there are many good suggestions already, mostly variations on the theme of carry-more-than-one-item. A higher capacity for stockpiles might help also in shortening the distances.
The whole point being that the game will change many times, and if something doesn't fit right now, doesn't mean it never will. I do completely agree that it would not be opportune to add dead ends in the resource chain. (Refuse, however, will always be with us and we'd better start thinking of fun/useful ways to dispose of it.. Realism as well as easy disposal requirements would be satified with a growing pile of slag and gravel somewhere at the bottom of a cliff.)