You won't have the "NAT as a firewall" dilemma because there would be no NAT - this whole thought experiment would take place in the 1996 era, before the explos

You won't have the "NAT as a firewall" dilemma because there would be no NAT - this whole thought experiment would take place in the 1996 era, before the explosion of NATs. Expecting your /32 gateway to do any firewalling wouldn't be too different from expecting your ISP to do the same for the entire city at the /18 level.