...Ten years later...
"SimpleY is no longer Simple, it turns out that although we got 80% of what we wanted for 20% of the price, the last 20% of what we wanted were responsible for 80% of the overruns!"
And an X-wing could take out an F-35, I mean, if we're talking complete hypotheticals.
The Harrier is battle-proven everywhere from the Falklands to Afghanistan. Marry it up with modern radar and air-to-air missiles and you will have a very capable platform - one that the F-35 - if it ever flies in combat - which it won't because no-one will risk those mind-bogglingly expensive airframes in a shooting war - won't see coming because its radar has rebooted again.
However, the argument you're making is silly. A Harrier won't beat an F-35 in combat. The F-35 would shoot down the Harrier before the Harrier had even detected it.
The argument you SHOULD be making is one of cost, performance at roles (e.g. CAS, bombing missions, etc), proven for naval operations, extremely flexible, and would likely be delivered sooner (even if they started today, if only one manufacturer was involved, it will likely ship before the naval variant of the F-35 in 2022 or whatever they're guesstimating now).
The core problem with the F-35 and F-22 is that they're the most advanced air to air combat aircraft ever built, so advanced in fact that they have nothing to fight, and worse still will arrive right before swarms of drones take over from manned aircraft (e.g. 10x drones Vs. 1x F-35, the F-35 would literally run out of munitions).
* Greater STOVL performance, without the limitations imposed by needing to carry water for thrust augmentation
* Low observability (certainly lower than a Harrier, which has a big RCS)
* Greater sensor capabilities. Built-in electro-optical targeting so that radar can be used less, or not at all
* Reduce pilot workload by filtering information presented in an intelligent way
* Reduce STOVL cognitive errors created by differing control schemes between STOVL flight and conventional flight
This sounds an awful lot like an F-35B.
My point is, saying you want a "modern Harrier" isn't enough. Because in many important ways the F-35B is a "modern Harrier". You have to figure out how whatever it is you're going to build will be different, if you hope to avoid the same problems.
This doesn't translate into a tactical capability today: Falklands: Harriers fighting Mirage III, which were 20 years old, 34 years ago. Afghanistan: dropping dumb bombs on adversaries who didn't have a SAM capability
Given the situation, it would make more sense to invest in something cheaper that will do the job just as well.
The same criticism has been levied on the F-35, due to the S/VTOL airframe support requirement.
Harrier design is also completely not low observable. An F-35 could splash any harrier derivative from afar, and could probably beat out an Harrier in anything but the lowest altitude, lowest speed confrontations.
F-35 is full of problems, but there's no sense in bringing up ridiculous arguments. Harriers might be able to perform some CAS roles better than a F-35, but it would get completely demolished in any 'stand-up fight'.
Any attempt to turn something based on a Harrier airframe into something as LO and as fast as the F-35 runs most of the same design risks and problems as the F-35.