The only time i've ever seen threading really work well is when it only includes the headers, like with email or newsreader clients, and there's a separate frame altogether for the text (which makes it in essence follow a flat style.)
But threading the text as well just makes long discussions difficult to follow and unreadable as the margin starts to get cramped.
Which on HN is apparently part of the reason they do it the way they do.
That's an understatement.
But seriously, I agree with everything you stand for in regards to how internet discussion should work. Flat discussion is vastly superior, even when weighing the negatives