It makes me wonder how different things would have been if, after a contestant got a question wrong and lost $5, Jim kept reading the question and allowed the other two contestants a chance at the rebound.
Probably would address most of the flaws you mentioned, but I would say it was probably not worth the disruption of the game. I always appreciated how Sale moved at a pretty good clip, even if it just became a battle of reflexes with victory based first buzz-ins over dollars lost on incorrect answers. Plus, there was still the motivation to try to finish the game with as high a score as possible to get to buy the better prizes... until the switch to the Winner's Board took the wind out of Sale's sails in one fell swoop.
I'm not sure why people get so hung up on this aspect of Sale. The majority of the stuff was overpriced luxury items with no realistic use. Or, as the series came to a close, worthless junk.
To this point, and to this flaw, this is where I highlight Jim Perry's excellence as MC of this game. I often find myself rooting for Jim over the contestants. When a contestant waxes eloquent about how much he'd like the prize and then agonizes over pushing the button, and then comes the price cut or a few Benjamin Franklins that gets the push... It makes for great television.
Granted, what I didn't like, which seemed to be the case as the syndicated version dragged on, was how the Instant Bargains started falling along one of three lines: If you have a lead over the sale price, you can buy the bargain at list price and get some extra cash; or if you have a lead less than the sale price, you get the price cut to the value of your lead or some extra cash for losing your lead by buying at list price. I'd like to have seen more stunts such as forcing to buy at a loss of the lead or letting the contestant keep the lead by a buck or some nominal amount. I want to say the early part of the daytime run had more flexibility on the Instant Bargain bargains, but I suppose if they fell into the aforementioned pattern, it was what worked for the budget.