What if we just haven't looked in the right place yet? We have looked closely for intelligent signals at only a tiny, tiny fraction of the stars out there. How can we assume life doesn't exist out there or is beyond our capability to detect it at this point?

I think it's a combination of a modification of A, alien civilizations are out there, but are just too far away to be detected (they suffer from the same problem, not being able to detect us or one another), and D, the Singularity happens to any sufficiently advanced civilization. In which case, they Transcend in some manner, and become undetectable to us.

"In that case, the Fermi Paradox is really just the observation that nobody stops in the middle, and there probably aren't very many civilizations "in the middle" within detectable range of each other at any given time."

As each civilization technological infrastructure accelerates, and approaches the technological Singularity, it spends a comparatively short time in its "radio-age." Acceleration means each technological age is shorter than the one it succeeded. That means the chances of two civilizations meeting each other or even detecting each other during their respective radio ages is very remote. Star Trek, notwithstanding.

I guess I have a darker view of the universe: no civilization has ever contacted us because as soon as they develop perfect VR technology, they turn inward and spend all days plugged into their machines living out fantasies until their sun goes out.

Look at WoW players, we're half-way there ourselves. :)

FYI - Those are actually my three possible explanations, which The Daily Galaxy borrowed from a column I wrote last January.

See http://www.nanotech-now.com/columns/?article=149

Sorry I missed that, Mike. I have noted your original piece, above -- Phil.

In the preceding post, you talk about how the cooperative instinct seems to be growing in Humankind, to the point where we're now trying to protect species who were previously our competitors. Given this, I don't think you can completely rule out the possibility that numerous galactic civilizations exist, but cooperate to shield primitives such as ourselves from traumatic culture shock. Yes, there are good arguments against this "Prime Directive" concept, but it should not be left off the speculative plate entirely.

It can only be Option A: Rare Earth & Rarer ET

Carl Sagan's Copernican Principle of Mediocrity is totally obsolete, now that we know of the numerous Goldilocks improbabilities that engendered us:
1. Our 'quiet'Galaxy has a 5-percentile level of merger-collisions (unlike violent M31 vs. none here for 10Gyr)
2. 10% of stars are sun-like, half of those aren't ruined binaries such as alphCen. Also, the Sun was then at 90-percentile metallicity on a 80-percentile friendly orbit: Sun is a 1:1000 star out of a hundred billion.
3. A 1:100 nearby supernova contributed vital Al-26 for irreplaceable radiogenic heating.
4. A 1 in 1000 level of solar system stability, with Jupiter guarding against comets.
5. A 1 in 1000 (million?) giant impact that gave otherwise unattainable rapid rotation, stable obliquity, and a thin crust that allows plate tectonics, all indispensible for metazoan habitability.
(By this point there's only one EarthWorld in our Galaxy, and you're sitting on it.)
6. A Goldilocks combo of orbit and atmosphere kept Earth unfrozen by the Faint Young Sun. Goldilocks amount of ocean water too.
7. Occasional stimulative catastrophes favorably reorganized the biosphere (Snowball Earth, Permian Crisis, KT Impact, Ice Ages).
This 'Rare Earth gauntlet' mean that the nearest EarthWorld is probably one Super-Cluster over.
But wait, there's more.
Subsequently, a cosmic handful of terrestrial-planet 'lotto winners' is subject to the equally severly winnowing factors of 'Rare ET':
1. All land animals breathe involuntarily and so can never talk or become intelligent, but quatic animals do voluntarily breathe but will never have hands or fire. Only semi-aquatic animals could become talkers, but before it's too late they must be sent back to the land, in our case by a land bridge.(Google 'Aquatic Ape')
It happend to our fructivorous tree-ape forebearers living on Danakil Island (half the size of California) now the Danakil Alps in Eritrea. It was a Miocene jungle island that became a Pliocene desert isle, driving the apes (already partly bipedal from walking on branches) into the food-laden marshes and shallows, which is the only way to get immediate survival value for voluntary breathing, upright posture, and nakedness. Thus, we're the only apes that float, love swimming pools and the beach, and are born knowing how to swim.
2. Much later, a descendent species of naked ape adopted fire. How inevitable was that?
3. Ice Age climatic instability gave intelligence a premium, as well as running, which enabled rapid speech, without which no civilization is possible.
4. Homo sapiens nearly died out 120,000BC when there were only 600 breeding pairs.
5. There will be no more interglacials, so this one was our last chance to start civilization. The impending Ice Age will be permanent.
6. Ours is the only one of hundreds of civlization throughout history to go high-tech, so it can't be all that inevitable.
7. Socialism is on the march, and if it triumphs it will permanently end our high-tech status.
Neurosis is inherently endemic in all intelligent species and when ET goes high-tech it inevitably brings about socialism, the vileness of which is even worse for long-term survival than the equally instinctive and nearly as dangerous nationalism & war.
8. The vastness of time between separate occurrences of an ET arising. Even if one were next door, why today?

Thus Option A, 'The Anthropic Gauntlet'
The visible Universe seems the minimim size to have at least one high-tech ET (us, for now) at any one time.
SETI eat your heart out: this is not an SF-lover's universe. (But please continue listening in case I'm wrong.)