Peter,
The points you make certainly are reflective of what Diamond and Shirky laid out in their Health Affairs paper. Like you, I whole-heartedly agree with their sentiments and arguments. To date, much of the HIT efforts at the federal level have been focused on the wrong things.
And while I do agree with the premise of your post, let's give consumers what they need to better manage their health, the post seems to gloss over a very real problem today and that is simply getting the consumer engaged in the first place. Sure, their is a segment of the population that is already there but it is a very small minority. There is a far larger segment of the populace that needs to "get religion." As you well know, how we get there from here will be a long road less traveled, but one we both believe is worth taking.
But beyond getting the consumer engaged, we must also address the calcified healthcare system with its perverse incentives and vested interests, let alone just getting the medical establishment comfortable with the consumer having some control of their health data. The more I think abut it the more I believe that it will be on this battlefront that we will face the most significant challenges moving forward.