Dann,
You bring up many good points about tornadoes vs. land spouts vs. cold air funnels. We've been having similar debates here the last few days. It's one of those gray areas that's hard to define. I think specifically by definition any violently rotating column of air that touches the ground could be considered a tornado. Regardless of the formation process. Rarely do land spouts produce damage, but like you mention there are a few notable exceptions. Though, even dust devils can produce minor damage.
I think from a forecasting / weather watch standpoint, it's very useful for us to classify phenomena based on formation process so that have expectations of potential development based upon meteorological factors. Really, all vorticies form in the same process...stretching of vorticity. In most cases in the atmosphere, the stretching occurs by enhanced vertical motions of some pre-existing low level shear. With "meso-cyclone" induced tornadoes, you have pre-existing vorticity aloft, and generally very strong updrafts, which can lead to very strong low level circulations. With land spouts and water spouts, there is generally little in-cloud pre-existing vorticity, and it's simply vorticity stretching by a weak to moderate updraft that happened to pass over the region of low level shear. Really cold air funnels and land spouts form by the same processes, except one doesn't touch the ground.
I think the issue for us as an agency trying to issue weather warnings is the message we are trying to send to the public. I think sometimes this works it's way into the terminology and criteria we use to base our warnings on. I think this plays into land spout vs. tornado terminology, in particular the 60 MPH limit. This is basically the definition of severe vs. non severe winds, even though there may be no real scientific basis for the 60 MPH limit. In general, land spouts are short lived and are not particularly hazardous, with a few very notable exceptions, therefore typically non-severe. For most people a tornado means a very damaging / life threatening phenomena. So the terminology and criteria may have grown around the expectation that land spouts are more of a nuisance then anything, even if by strict definition a land spout might be considered a tornado as in a violently rotating column of air. Though, the specific definition of a land spout is: "A form of tornado not associated with a mesocyclone of a thunderstorm that touches the cloud base and the ground".
The other problem for us, is that this is probably the first report of a land spout / funnel in many years that we could actually verify. Even then, we didn't hear about it until at least 40 minutes after it happened. So a warning would have been useless. If there are no indications on radar, or if the weather for the day isn't necessarily conducive to classical tornadoes, when we get these reports, it's either generally too late to issue any type of warning or special weather statement, or we can't verify them and thus don't have the confidence to issue any products.
Hope this helps.
Gene Petrescu
SOO WFO Missoula