As my first post to this fine board I would like to add weight to the poo argument.
In serious terms I think it could be quite fun to have this new mechanic in here, adding a new way to lose, which of course, is always fun. And as there's already plans to add poison contaminants (to infect the water supply, among other things) and diseases, it does indeed make sense. The applications for farming, fuel, etc. are very interesting.
Of course the scope for humour is wide. Here's one I've not seen anyone mention yet: Sewer raids.
Goblins sneak up the waste pipe, trudging through accumulated filth, until they reach an opening. One unfortunate dwarf gets a rather rude shock as a spear is thrust up the bowl of the latrine, the goblins searching on for the next "entrance". The party clambers up out of the pot, but the last two are swept away by the periodic flush triggered every time a slow-filling cistern begins to brim. The remainders sweep through the inner portions of the fortress, slaughtering craftsdwarves while the armies are preocuppied with the larger force taunting at the gates, afterwards slinking out the back passageways without detection.
"And thereafter, all dwarven children were taught to mind their stools, lest the toilet-fiends snatch their souls from their bottoms"
Also, magma men should drop obsidian "logs"