On the one hand, I think there should totally be a path to Peerage for those who have had a major impact through fencing; I think that's true of every activity.
OTOH, I think this is the *worst* way we can possibly deal with that. Rapier *ought* to be recognized through the Chivalry, and I'm still cranky that that doesn't have a snowball's chance in Hades of ever happening -- the armored fighters hold the levers of power, and by and large they won't allow it. Failing that, we ought to reinterpret the Laurel or Pelican to be more accepting, or at the *very* worst, have an Order that is designed to be welcoming of all martial activities. As it is, creating a Fencing-Only Peerage means that we are inevitably going to have to create more and more Peerage Orders in the name of fairness. If we're recognizing Fencing today, we should absolutely have one for Archery, and then, I don't know -- Equestrian? Thrown Weapons? (And God help us when someone points out that excellence in execution and behaviour isn't the sole province of the martial arts.)
From an organizational-design standpoint, it's idiotic and damaging: the rise of Zillions of Specialized Awards is one of the worst blights on the SCA today, and I utterly hate the idea of it spreading to the Peerage. We like to say that our awards aren't just "merit badges", but that is certainly what they're coming to look like, and they get steadily less meaningful as they get sliced-and-diced more finely.
All of which said, we have a cultural problem: we are deeply failing all of the martial communities other than heavy list, and that *does* need to be fixed. IMO, the only thing worse than the current proposal is the status quo, and the proposal on the table may be the only politically feasible way to fix it.
(I hate the name "Order of Defense" as well. Would anyone care to argue that "Order of Chivalry" is a name worth emulating? I've always felt that it was one of the more painfully mundane anachronisms we have. I wish someone would show the imagination and backbone to give this proposed Order a real name...)