And I just finished pointing out that these are not "degraded" photos. Do you want to back up your assertion? Start with a jpg Original. Retouch it in some inconspicuous way. Then do some pixel-peeping comparing the Original vs Modified versions.
But do you consider, that the downgrading will accumulate, if you edit the edited photos again? Each new rendering of your edited photo will add some new JPEG artefacts and remove a little detail, unless you set the quality slider so high, that the photo needs more storage than the original.
Keeping the originals will protect you from accumulating these approximation errors. And you will be able to always start from the original and be able to revert to the original with one click, if you notice, that you made a mistake. For example, a wrong white balance adjustment, because you did not notice that the display needed calibrating.
It easier to keep the originals paired with the edited versions inside the iPhoto Library and have iPhoto manage them, then to have to track down the originals in some backup folder and and have to reconnect the originals manually in an emergency.
I did what you did when I first started with iPhoto more than ten years ago. At that time I had an iBook with not much storage and I let iPhoto Diet replace the originals by the edited versions. And this mistake is haunting me until today. I have still not recovered and reconnected all original master images for the Photos that I want to keep, because it is so much work to reimport the originals again and to recreate the edits.
If you need to store originals outside your iPhoto Library, consider to use Aperture instead.