You are probably right. You know far more than I, but I do have a knack for seeing paradigm shifts coming. Take that as you will, I can't prove it, it's just personal experience. Just try to remember, if this all unravels in favor of my position, that you talked to some guy on the internet who saw it coming. It's getting pretty annoying having called it ahead of time, and no one remembering or caring that I said anything.
"The early embryo is a hotbed of activity for endogenous retroviruses, recent studies have shown. To understand why embryonic cells make viral proteins, scientists have run experiments to see what happens when viral genes are silenced.
These experiments suggest that viral proteins help the embryo develop a variety of tissues.
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From the op article.
I'm am not an expert in this at all, these are just my thoughts on the matter, take them or leave them.
Regarding regulatory networks binding together elements so as to orchestrate changes in morphology - I had not thought about this, of course you are correct. Where you say that the viruses are too simple to drive sufficiently complex changes to the regulatory networks, I would counter by saying that chance mutations are sufficient to drive these changes.
Here's a thought. Perhaps viruses are picking up DNA from host organisms and transmitting them to new hosts as they pass from one to the next. Viruses that transmit advantageous DNA will survive in our genome. Viral DNA can be particularly useful when it has an impact on the morphological development of an organism, i.e. as it is developing from an embryo. If this is true it is not surprising that we find a lot of activation of retro viruses during embryonic development.
This also provides us a clue about how cancer develops. These retro viruses are associated with the changing of form and function of the cell within which they are contained, since they impact this within the development of the embryo. When they are activated within adult cells they drive similar functional changes. Which might be why many cancers, seem, to me, to look like distinct entities, like the tissue has suddenly switched to a different functional mode. It's not just one characteristic of the tissue that has changed to make it dangerous, but a whole constellation of changes that together seem to form a unified whole. I.e. we are looking at groups of changes transported into the genome by a virus that has propagated because those changes are advantageous to the host organism. These changes do not suddenly arise within the body due selection pressures on the tissue, but are activated and mediated by the virus.
This kind of cross species transportation of DNA, could well be analogous to what we see at the microbial level, where horizontal gene transfer is an important driver of evolution.