@farmerman,
farmerman: "... when the mutationists have a way to explain away the retention of "fossil genes" that memorialize the mother species (say in geographically isolated species or those that adapt to extreme environments or those that have "descended" from dinosaurs), Ill be first in line to listen and discuss."
If a mutation confers some advantage, but it occurs in a specimen that, for entirely unrelated reasons, doesn't have reproductive priority, it won't get passed along enough to spread through the population at large.
For example, improved vision that allows deer to see predators better, but which occurs as a mutation in a smaller or less aggressive buck, won't become widespread because mating is a privilege reserved for large aggressive bucks who are able to dominate their rivals in ritual combat determining mating privileges.
So we might expect a large number of adaptive advantages to be lost this way, since mutations are random but alpha males are by definition rare.
A population local to an alpha male who develops an advantageous mutation is likely to spread it as widely as his seed, since his genes will be passed on to an increasingly large part of the herd with each new generation.
An isolated population is unlikely to independently develop the same random mutation, particularly if it is smaller than the main group, as is frequently the case with geographically isolated niche populations, as well as niche populations making the most of extreme environments.
So far as I know, almost all dinosaur species were wiped out in the extinction event.
As for old (inactive) genetic material, "memorialize" suggests some far-sighted intent on the part of molecules. We could say more objectively that old genetic material is retained (not necessarily in a "backup" format, but usually with a lot of corruption and overwriting, much like old sectors of a hard drive that are no longer linked to the file directory).
I also wonder why, as an adaptationist, you don't describe these "fossil genes" as non-adaptive, since they've been retired in favor of mutational versions or new genes altogether, and by the ipso facto logic of adaptationism, that must mean they're adaptationally inferior. (Though I myself see nothing opposing the idea that genes which perform superiorly relative to a particular environment may go out of service for reasons unrelated to their adaptational utility.)
So, we could rephrase the question: Why is (putatively non-adaptive) genetic material retained?
Pretty clearly for reasons involving molecular biology. A better question is, why would you expect them to be snipped out rather than carried along? Molecular biology isn't goal driven, it's driven by blind mechanical processes. There is no wise editor, there are biochemical reactions that cause a greater deal of no longer useful genetic material to be accumulated over time.