I don't normally read this blog but the safety guy at work posted a link to a post on it that really got on my nerves. So a few comments on it: (I apologize that you'll need to read the ranting of the original post for this to make sense. Update: I submitted a comment to the blog post as well; they apparently didn't feel the need to post it. Ah well.)
1) The title of the post makes it seem like there's some sinister plot by the FAA to dupe and potentially injure air travelers, which doesn't seem to be the case if you actually read the Directive.
2) If you search Google for AD 2011-04-09, the first link you get is the FAA's public posting of the Directive, on their web site. I'm not sure why the actual Directive wasn't attached or linked to (probably because it doesn't support the poster's argument) but it is easily accessed.
3) The post suggests that the oxygen supply is removed but the mask is stowed as if it will still work, and there will be no notification to passengers. This is not necessarily the case, and even the single sentence paraphrased in the post tells how the actual response by airlines might be different. What the Directive does is allows the airline to remove the safety hazard (of the chemical oxygen generator) without making potentially significant modifications to their aircraft. The Directive doesn't instruct the airlines to re-stow inoperative air masks; it gives them the option of re-stowing or removing them. The access panel is generally hinged, so the options are to close it, leave it hanging open, or removing it; removing it would result in an unsightly hole in the ceiling that would give passengers a potential interface to tamper with the aircraft (or injure themselves). Just closing the door means that the airlines can easily comply with the Directive without having to make big modifications their aircraft. Passenger notification is not addressed in the Directive but that doesn't preclude flight attendants from noting the modification during the pre-flight safety presentation. Modifying an aircraft involves a lot of regulatory requirements that make modifications an expensive and time-consuming process. Directives are written with the intent of maintaining the safest possible air travel environment without creating an unreasonable burden for airlines and aircraft manufacturers. When the FAA mandated that all commercial flights in the country be non-smoking, they didn't require airlines to remove ashtrays from the seats; airlines and aircraft manufacturers have made those modifications at their convenience.
4) The post suggests that the airlines are allowed to make this modification in order to save cost and weight. Even a perfunctory reading of the Directive reveals that the airlines are required to take this action because the chemical oxygen generators in lavatories pose a specific safety risk that the FAA has deemed unacceptable. The option of expending the canisters saves no weight.
5) The post makes a big deal of the "time of useful consciousness" at various altitudes. What it omits is the fact that while an oxygen-poor atmosphere may cause you to lose consciousness and wake up with a nasty headache, commercial aircraft don't reach altitudes where the low oxygen concentration poses an immediate health risk to most passengers. The flight crews of aircraft have canisters of breathing air (not chemical oxygen generators) so that they can continue operating the aircraft and oversee passenger safety during a depressurization event. Passengers have oxygen masks so that most of them will stay conscious during the event so that they can evacuate the aircraft once it lands (or crashes). It is not assumed that every passenger will be able to help themselves; flight crews (and fellow passengers) assist those who are incapacitated. In this vein, the Directive instructs flight crews to check the lavatories in the event of cabin depressurization in case someone was inside (another overlooked detail).
The actual news here (that there is no longer emergency oxygen in commercial aircraft lavatories) is nearly lost in the zeal to accuse the FAA of compromising passenger safety in the name of cost savings for airlines. I'm not sure how that's helpful to anyone.