PunctualAlex,
Thanks for the insight.
If I ride this enough to smash up the dropout, then I'll know it's time to buy the *real* thing.

I was giving preference to the 700cc bikes, but I figured that if I needed, switching most 27'' to 700 wouldn't be too bad if I only ran a front brake, as i intend to.

I understand that grinding off the now- unnecessary bits would be purely asthetic, but I fail to see what's "wrong" with it. Seems to me that you may as well, if you'll be repainting or stripping & clearcoating the frame. Is the issue that some "ruin" a classic frame in the process?