Mainstream cosmologists are waiting for the death of the main leaders of the heterodox idea (mainly Arp and the couple Burbidge) to declare the idea as definitively dead.
There are, however, many papers in which no objections are found in the arguments and they present quite controversial objects, but due to the bad reputation of the topic, the community simply ignores them.
I think that the large SDSS data releases have actually made the problem of QSO distances harder to analyze. When Arp started, there were only a small number of very bright, radio loud QSO's. The apparent associations with large, bright, local AGN was fairly compelling. However, as the surveys go to much fainter objects, it becomes more difficult to identify the parent galaxies to the QSO's because the number of candidates increases exponentially.
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