'lazy' was doing part of its job, but not all!  In particular,
an application
  f (lazy e)
where f is strict, was still being compiled using call-by-value in
CorePrep.  This defeated the purpose of defining catch as
   catch a b = catch# (lazy a) b
See Trac #11555, and Neil Mitchell's test case in comment:14

This patch makes 'lazy' behave properly. I updated Note [lazyId magic]
in MkId, but all the action is in CorePrep.

I can't say I really like this, but it does the job.