Are portions of the inconvenience caused, and the perceived high amount of fraud and evasion, a result of a self inflicted stance by the US, mainly taxing on citizenship, not residence? And yes, I concede the law is the law. There must be a temptation to look at 6 million Americans abroad and conclude "they're all at it!".
To expand successful detection abroad, the US has attempted to compel the rest of the world to activily assit in it's internal efforts concerning it's own citizens, without reciprical actions, and damn those 'foreigners' that won't assit. That's quite a different strategy from other tax authorities throughout the world that are quietly developing agreements between themselves to solve tax evasion (for example, the UK/Swiss agreement). Although there may be reconsiderations, politically, Congress will not want to be seen as 'backing down'. No surprises there. So far, publicly, the only compromises have been with dates of implementation and a rogue statement that foreign financial institutions won't have to do person by person nationality checks on every one of its customers, at least not in the beginning. The above article (in post #9) talks about circumventing privacy laws. That's not a compromise, that's finding a different way to do the same thing.
Nonetheless, I'm sure many of the world's tax authorities are looking to the US effort with amazement, and envious eyes.
And, many thanks for the update. It's appreciated.