Okay, we had a meeting to discuss these issues and came to the following conclusions:

1. keep this behaviour as currently implemented
2. in the web UI, investigate ways to improve the display of resource lists that currently show resources both up and down the tree, e.g.
  1. filters that allow the user to select "upwards" or "downwards" views
  2. allow multiple current taxonomies, so users can select an entire tree of current taxonomies
  3. encourage users to stay in "any context" and rely on search techniques more
  4. add the taxonomies for each resource to the list
3. in the CLI, investigate ways to show available resources for host creation, since "hammer domain list" will show all domains, not necessarily those relevant for host creation in a given context

We generally felt that the host index was intuitive, looking "down" only and that looking both up and down made sense for resources, so you could see things that had filtered down to you, and that were in your context's children.

For host creation, users should be encouraged to create hosts in leaf taxonomies, or to assign resources higher up the taxonomy so they're available.