After reading the very intereting article and comments I come to the conclusion that we're trying to heal the system by curing single symptoms. That's not the holistic approach as it would be needed here.
What I think LL needs to do are 2 very basic (and yet simple) things:
1) invest heavily into more and better servers
1a) hire more networking guys
1b) stay abreast with new code (physics and core)
1c) get rid of homesteads since they are the very reason of lag
2) lower the tiers
2a) a full sim for the price of a homestead is still too expensive but would be a starting point
The first would help against the lag and crashes while the second would make people stay longer and care more about the product. More concurrency, more money spent in SL --> everybody happy.