I'm getting dizzy from watching this thread spin in circles
There are a few things that are pretty evident, though.
First, this thread is not about icons, nor has it ever been. It's really--like almost any Protestant-non Protestant debate--about sola scriptura, and more specifically, the distinctively Reformed-Puritan strand of Protestant tradition that is usually called "The Regulative Principle." It's defined, though not by that name, in the Westminster Confession of Faith in Ch. 21.1
But the acceptable way of worshipping the true God is instituted by Himself, and so limited by His own revealed will, that He may not be worshipped according to the imaginations and devices of men, or the suggestions of Satan, under any visible representation, or any other way not prescribed in the holy Scripture.
A more "gentle" phrasing could be taken from "Theopedia" or other online sources as:
The Regulative principle of worship in Christian theology teaches that the public worship of God should include those and only those elements that are instituted, commanded, or appointed by command or example in the Bible.
It's worth noting that this is not just a bone of contention between Reformed and Orthodox or Catholics, but between Reformed and Lutherans, Anglicans, many Wesleyans, and others. Notably, among groups that all claim to adhere to sola scriptura.
When I spoke of layers of tradition, I meant the following:
1. The canon of Old and New Testaments is assumed. Yes, I said it,
assumed. While many will point to church history, etc., in the end, for Protestantism, the canon of scripture cannot be tied to any council or any decision of the church...it must simply be taken as a given. Notice that the Reformed Confessions like the WCF do exactly this. They simply list, as a given, which books are and are not part of the canon of Scripture. Note the progression of the WCF's first chapter, in which it states (1) that God has revealed himself through Scripture (no argument there), (2) which books are in the canon, (3) that the "apocrypha" are not in the canon, (4) that the canon in no way depends upon the church, (5) that the testimony of the church is well and good, but ultimately...AND THIS IS KEY...
yet notwithstanding, our full persuasion and assurance of the infallible truth and divine authority thereof, is from the inward work of the Holy Spirit bearing witness by and with the Word in our hearts.
What's that, you say? Ultimately, we either do or don't agree with a particular list of canonical books depending on whether the Holy Spirit is testifying in our hearts. I.e. it's ultimately subjective, despite all the insistence that it's wholly objective.
2. The way in which Scripture is to be interpreted, is assumed. Note WCF 1.IX,
The infallible rule of interpretation of Scripture is the Scripture itself: and therefore, when there is a question about the true and full sense of any Scripture (which is not manifold, but one), it must be searched and known by other places that speak more clearly.
Which are the "clear" and which are the "less clear?" That's clearly (forgive the pun) subjective, hence the myriad denominations who all swear that they and they alone are reading the bible "clearly." And "not manifold, but one?" That's likewise an interpretive assumption grounded squarely in the humanism of its day, since the church from its inception clearly (there we go again!) made use of allegorical and spiritual senses of Scripture. This assumption about how Scripture is to be interpreted, is simply a Protestant tradition that developed in reaction against Roman Catholic traditions of how Scripture should be interpreted.
3. Finally, the regulative principle is assumed. Whatever isn't clearly commanded (who decides what's clear?) isn't to be practiced. Hence, those who would go into palpitations if someone lit a candle in church for any reason other than providing light by which to read Scripture. This is the highest layer of this interpretive tradition, because at this point we are distinguishing Reformed-Puritan from the broad swath of Protestantism. You are presupposing not only Protestant traditions over Orthodox traditions, but Puritan Protestant traditions over other Protestant traditions.
So your OP can't be meaningfully engaged, because we're standing in two separate rings, swinging over the ropes and never connecting. All the Scriptural, historical, logical arguments in the world will boil down to one thing: how do we respectively interpret and make sense of those facts? Given your assumed traditions, that I've already outlined above, you will always declare that Scripture forbids the use of icons. It can't end any other way.
To be as objective as I can be? I don't believe the NT actually gives any direct guidance on the subject. Thus the reason we must move higher in our thinking. This is why, politics or otherwise, the 7th Ecumenical Council finally decided the issue as a matter of christology, not just iconography. If Christ is truly man, then he truly can be depicted. The Son of God can be depicted on wood, with paint, etc. The same as any other man. The veneration of icons has a somewhat clouded history, yes...but as Army alluded to earlier (and Tzasious I believe) it goes much further back, and we do find very early allusions to the veneration of relics and holy places (grave sites of martyrs, for instance). Veneration of icons follows suit. And the Christians of that era borrowed from the language of philosophy to explain, as near as possible, how this could be so.
Much like St. Basil borrowed from the language of philosophy when speaking of hypostases to explain how he believed in ONE God while still insisting upon the full divinity of the THREE Persons. This, by the way, was the context in which he wrote the statement you quoted about "let Scripture decide between us."
If you want to argue that the 8th Century decree in favor of icons was somehow invalid because it (a) was heavily political, involving emperors and (b) used philosophical language in ways that hadn't been clearly seen before, you may as well throw out the Nicene Creed and the councils that produced it. They were heavily political, involved emperors,and used philosophical language in ways that hadn't been clearly seen before. In fact, it was that very thing--the use of philosophical language not found in Scripture--for which St. Basil was attacked by his opponents, described in the very letter from which you pulled his quote. Keep that in mind when you cite him as support for "sola scriptura."