It seems to me you have a good argument for ESPN HD, and you have stated your case very well. Whether federal law and FCC rules support your argument, I don't know.
I do know that Comcast's basic philosophy is that it should not pay extra for HD programming when it is a simulcast of an SD channel. So you definitely have a sympathetic argument. If necessary, you could pursue it at the corporate level (start with regional VP, for example).
However, re March Madness, ESPN HD is of very little help, since all the games are on CBS. Most of what ESPN HD does right now is NOT HD, but stretched SD. However, on April 4th, Sportscenter is supposed to go HD (all Sportscenter shows every day, which I think means the studio shots are in HD and some highlights are in HD but most highlights during the show will still be in stretched SD). If I were you, I would check the ESPN website for ESPN HD, where you will find the schedule of live events in HD before April 4th, to see if it matters to you.
Of course, after April 4th, ESPN HD will have more HD value, so even if there is little in the way of appealing HD before April 4th, that of course doesn't ultimately resolve your dilemma.