It is a great general section on ALT text... however, the term Equivalent Purpose is a pivotal term in WCAG 1.1.1 when describing it's requirements. You catch the spirit of Equivalent Purpose, but can we work that in somewhere into the general section?

http://www.w3.org/TR/UNDERSTANDING-WCAG20/text-equiv-all.html

Definitions in Merriam-Webster

Equivalent (adjective) 
Corresponding or virtually identical especially in effect or function

Purpose (noun)
Something set up as an object or end to be attained, intention

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Suggested amendment
"... the value must be an appropriate replacement for the image, <add>It should serve the equivalent purpose except for exceptions discussed below.</add> 
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The exceptions being those in WCAG 1.1.1

     Controls, Input: If non-text content is a control or accepts user input, then it has a name that describes its purpose. (Refer to Guideline 4.1 for additional requirements for controls and content that accepts user input.)

    Time-Based Media: If non-text content is time-based media, then text alternatives at least provide descriptive identification of the non-text content. (Refer to Guideline 1.2 for additional requirements for media.)

    Test: If non-text content is a test or exercise that would be invalid if presented in text, then text alternatives at least provide descriptive identification of the non-text content.

    Sensory: If non-text content is primarily intended to create a specific sensory experience, then text alternatives at least provide descriptive identification of the non-text content.

    CAPTCHA: If the purpose of non-text content is to confirm that content is being accessed by a person rather than a computer, then text alternatives that identify and describe the purpose of the non-text content are provided, and alternative forms of CAPTCHA using output modes for different types of sensory perception are provided to accommodate different disabilities.

    Decoration, Formatting, Invisible: If non-text content is pure decoration, is used only for visual formatting, or is not presented to users, then it is implemented in a way that it can be ignored by assistive technology.