>no local variables

They're not standard, so don't use them. Instead I often find a subshell to be sufficient. You can declare a function like so:

    my_func() (
        local_variable=10
        echo $local_variable
    )

This is also a good strategy for helping you make purer shell functions.

>no process substitution, so one has to use temp files, temp named pipes or possibly joggle fd numbers

I don't find myself doing this often enough to care. It is possible, and if you're writing something which heavily relies on this perhaps you're better off with Go or Python.

>set -o pipefail

I agree, we've been talking to the Austin Group about getting this standardized.

I think we should go further, too, not by attempting to replace the shell with something that tries to do shell scripts better, but by making full-blown programming languages in which shell things are nicer to use.