"let the watchmen wear their own cameras" isn't all that outrageous. It's a momentum thing. If all cops were wearing cameras any incident without footage would be suspicious. I think it will happen eventually.
I agree about internal investigations. They shouldn't be internal. Investigating police and other law enforcers should be a separate unit.
So for things like speeding, jaywalking, etc - you could get pulled over and a talking to by a mediator. Then if there was a problem that couldn't be mediated/otherwise handled, only then would they call in an actual officer who could write tickets, use physical force, etc.
Then it's very clear if you're being an ahole, you get to quickly deal with cops just like today. But if you're being reasonable, often disputes could be mediated without the confrontational baggage most police encounters today seem to engender.
The key would also be that you prevent the "real" cops from dealing with these lower-level issues until AFTER they've been mediated, so the escalation process is very clear and unambiguous. Or at least require them to have a mediator show up to...mediate...first.
Of course this is different from the environment in high-crime urban areas, but just as an example of how this can play out in a realistic way: the Burning Man festival has Rangers (mediators) who are there to help people resolve their own issues and handle minor incidents. In theory, the cops there are for backup in case of major incidents, but in practice they wind up being a pain in the a by literally being the "Fun Police" and shaking people down for minor alcohol and drug infractions. Pretty much the entire event's security needs are handled entirely by the Rangers and simple mediation.
The police there could choose to be be a valuable community resource, but instead generally wind up being resented by most of the community due to (at least a perception of) having generally antagonistic and abusive attitudes. This dynamic is the real problem more than anything else IMO - both on and off-Playa. When large numbers of law-abiding citizens have a negative impression of your entire profession, something is definitely wrong.
I also think it'd be great if cops had cameras on them at all times, and if they voluntarily did that themselves.
Unfortunately, that reality is a bit, well, unrealistic as well. My understanding is that APD has dash cams, but the footage often isn't released, especially in cases of suspected brutality, and often not even to those with an interest in clearing their names. Also, my understanding is that the Peaceful Streets folks arrested here never got their own cameras back, even though no charges were ultimately filed (I think the stolen camera count was at 4.)
I don't know what the solution is, but I don't think it is "let the watchmen wear their own cameras and decide what footage to release."