Brian,
Thanks for the response.
Hilbert space may be used as a abstract space to put information regarding physical states, but as you pointed out there is ample space for unphysical ones as well. This in itself is not a new insight. Surely you can't suggest that those mathematicians that developed quantum mechanics didn't understand this?!
Physical certainly is a derivative of physics, so if we go back to James C. Maxwell's book on physics, http://books.google.com/books?id=noRgWP0_UZ8C&printsec=titlepage&dq=matter+and+motion&hl=en#v=onepage&q=matter%20and%20motion&f=false
We find the first chapter is a discussion of matter and motion, which is also the simplest case described. It is here that our classical notion of physical states is ultimately derived. Hilbert space is fundamentally different in this regard. Physical states can be represented in Hilbert space, these are classical understood as relating to particles and forces, however there are plenty of other states admissible in Hilbert space that have absolutely no description in classical terms. These some would call unphysical. These are perfectly acceptable in the broader Hilbert space.
So perhaps its a matter of definition, in any case, hilbert space is an abstraction and not physical in the sense that it is a space where we our classical concepts reside. We might find a projection of hilbert space into a more classical space, but there is no there there.
As far as imagining the universe as a quantum computer, I think there is some validity as we restrict ourselves to physics above the plank scale, however, this is where we start running into some interesting problems, and it is likely that the complexity of physics below the plank scale are even too great for a quantum computer. This may also be where what might be considered unphysical states become physical. We simply don't know without sufficient evidence. However, one thing is certain, we cannot abandon Hilbert space as fundamental to our understanding, we might be able to find even more fundamental concepts, especially as we abstract into algebraic structures, but Hilbert space provides a key intersection to our understanding that is critical to the endeavor.