Russel's Paradox In this way the paradox is avoided by defining a set that contains 'All sets...' but not X. — EnPassant
I see what you mean. I'm still sticking to my previous statement on why this set is ill-defined. In any case, I don't think one can avoid Russell's Paradox proceeding in the way you have--regardless of the logical consistency of the argument.
We have to remember that Russell's Paradox established the inconsistency of Frege's set theory, in particular, the
abstraction principle which loosely stated that, given any property P, there exists a (unique) set A consisting of those and only those things that have property P.
Russell suggested we consider the collection "the set of all sets which are not subsets of themselves". Note that, by Frege's abstraction principle, this is
necessarily a set. Asking that we, in effect,
look the other way and consider instead another set, as you've proposed, doesn't prevent us from considering Russell's set.
The paradox establishes that the abstraction principle is unsound. Historically, this lead Zermelo to suggest the limited abstraction principle to prevent the issue--one would need to clarify
which set from which the elements satisfying P are being taken. Thus we cannot speak of the set of
all x having property P, but we can speak of the set of all x in A that have property P. For an explanation of how this avoids the paradox, I recommend looking at pg. 12 of Smullyan's book, linked in my first post.