For any medical or serious hygiene situation there seems to be a strong consensus that the breech of the curtain is fine. In most other situations it is merely distracting or at worst annoying. I strongly agree with what LexPassenger stated, rules would only confound all of us in the long run. I imagine that the problem happens mainly on flights where the curtain is not snapped to the dividing bulkhead.

If someone is simply inconsiderate or angry b/c of the seat they have well, we should collectively hunt them down in their area of comfort and take our relief there.:P