The original version looks too far, as it places a restriction on use. However, Rich's modified version actually seem quite reasonable to me. It doesn't feel like a use restriction anymore, it feels like a prohibition on infringing user's rights. More importantly, it's phrased as "your rights under this license terminate if". You don't need a license to *use*; you need a license to do anything *else*, like copy or redistribute. That seems like a reasonable balance.

Getting the details right will require a lot more clarity, but the general principle seems much closer to sound.