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> pass the buck onto your customers (even as a credit card usage fee),

Visa and Mastercard expressly prohibit surcharges for transactions made with their cards so that is not a workable solution.

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...and thus the concept of the "cash discount" was born.

And while it's purely a semantic distinction, as a consumer, I feel far better about getting 10% off the menu price at restaurants for paying cash, than I would feel about a 10% surcharge for paying with my credit card.

Cash discounts are only allowable by the merchant agreements for some kinds of transactions, such as gas stations.

A lot of people offering "cash discount" are technically violating their agreements with VISA/MC.

Not since 2010. The Justice Department reached a settlement with Visa and Mastercard overturning this provision:

http://www.nrf.com/modules.php?name=Newsletter&op=viewli...

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