Imagine the Monero blockchain has been around for decades. It is incredibly massive and the total number of outputs far exceeds the rate of new outputs being created. Can obfuscation acquired by the ring signature technique decline to useless levels? In other words, can the rate of recent new possible outputs being included in forthcoming transactions fall to near zero, because the probability of inclusion falls toward zero? The probability of a new output being obscured by x amount of signatures after time t would always fall as the chain extends.
Someone on reddit https://www.reddit.com/r/Monero/comments/7k4lwx/question_longterm_ring_signatures/ mentioned 25% of signatures on new transactions are selected from the last 5 days of blocks. This seems like a fatal flaw, because blockchain analysis can just ignore that 5 day spike and treat subsequent appearances of an output with a lot of significance. Am I misunderstanding something?
If this is a problem, the solution seems to simply make output selection a probability distribution decaying from more recent to more distant blocks. Old outputs reappearing would be significant, but observers would have much less confidence than if they could ignore most of their obfuscation.