I tried doing that with .remove() but the issue is that every time remove is called everything gets shifted up to fill the gap left by the removed items, which looks pretty confusing and jerky. Is there another way to do this?

That would be the most ideal solution. Come to think of it though, how would you handle the first part, removing old content? Wouldn't viewable content shift up every time you remove old content, since that space would become empty?

Really cool plugin. Would it be possible to add the option to start removing old content after a certain number of page loads? For one thing when users scroll past content they've already viewed there's a very small chance that they would scroll back up to view it again. This becomes truer the further away they scroll from it. The real issue though is that loading content this way uses a lot of memory, which means after a point the scrolling will become a lot less smooth and the user's browser could end up crashing. More damage done to user experience than convenience gained from infinite scrolling, wouldn't you say?