Knees and kicks to the head of a downed opponent are really two very different tools in mma.
Knees to the head of a downed opponent typically occur as a defense to a squared up shot, an offense in a north/south gound position, or less frequently, a GnP techinque from an advanced top position. Knees are really very effective defense against the wrestler's takedown. In my opinion, they definitely have their place in mma and the sport suffers when they are not allowed. North/South without them is a very boring position. I love wrestling, but I am getting sick of seeing fighters with nothing except a good double leg and sub defense win fights because they don't have to worry about getting stuffed with a series of knees.
We really haven't seen it that much yet, but what's to stop a fighter from taking a knee every time he gets caught up in a Thai clinch?
Now on to kicks. Lets divide up the types we normally see. Soccer kicks and head stomps. Soccer kicks are often seen as a devastating finish to an already damaged fighter. Cro Cop v. Waterman is a prime example. Cro Cop finished the fight with soccer kick to Waterman, who was basically crawling for a takedown. My argument for soccer kicks is this: Why should Cro Cop or any other fighter be forced to the ground just because the other fighter is there? A fighter should not be forced to engage a grounded opponent on the ground. Also, how much more dangerous was that Waterman soccer kick than Cro Cop's LHK on Igor? Herring v. Big Nog 3 might have ended differently if Heath had another choice besides either engaging the greatest heavyweight BJJ fighter on the ground or letting Nog catch his wits.
Also, without soccer kicks how long is it until we start seeing alot more BJJ-style butt-scooting going on in mma?
Finally, we get to head stomps. Head stomps usually occur when one fighter is standing and the other is on his back. The same argument can be made here as was made with soccer kicks. Why should a fighter have to enter into another fighter's guard to advance the action? Another point to be made is that while soccer kicks often happen to fighters not intelligently defending themselves, head stomps are more often used against fighters who are intelligently defending themselves by pulling guard.
My argument against head stomps is this: the postioning in which head stomps happen make them uniquely dangerous. This danger isn't really applicable to successfully performed head stomp. You are not going to squash someones head with a barefoot head stomp a la American History X. The real danger lies when a head stomp misses and ends up being a throat stomp. An errant head stomp could easily crush a fighter's larynx. A crushed larynx followed by a quick death by suffocation on live TV would end mma, and is too dangerous to the fighters to allow.
One question you may ask: How could the rules be changed to allow for soccer kicks but not head stomps? The answer is allow a leg strike with forward momentum but not with backward momentum. Sure it means the ruling out of spinning soccer kicks, but how many of those have you seen? This would only effect Cung Le