I see what you're saying, and I'll admit... the current setup seems very good at keeping rates low most of the time and as a lender I'd love to see them higher, but all the same, I'm skeptical of the idea that the swap market is as efficient as you seem to think. From what I've seen there seems to be (1) a large pool of people who take swaps in the course of trading without looking at them and without much caring what the rate is unless it was ludicrously high; the difference between (say) 0.1% and 0.11% wouldn't register as important enough to pay attention to, and also (2) a large pool of people who lend on 'full auto' or near to it, not wanting to devote time to figuring out an optimal rate and willing to lend at almost any rate down to near-zero.

If you graphed out a supply/demand curve for that, I'm imagining a long segment on both curve where they're close to horizontal - varying the rate having almost no effect on how much demand there is (because demand is primarily driven by traders wanting to capitalise on price movements, unrelated to the rate) or how much supply there is (because depositing/withdrawing fiat is enough of a hassle that it's easier to just 'let it ride' even when rates dip down). If anything supply is likely to vary most by people taking cash out of swaps to trade with or vice versa, again correlating it mostly with price movements in the bitcoin market.

So in a 'pure' market there would be outcomes where the amount of supply/demand at those horizontal segments are significantly unequal, and the rate either skyrockets or crashes depending on which is the largest, and a somewhat less well defined outcome if they're approximately equal, where the horizontal segments intersect and the rate can just freely wander around at random between the point where traders as a whole start to strongly notice their swap costs and the point where lenders as a whole decide it's no longer worth bothering with at all, which is a huge range.

The FRR acts to pick a rate in that range and cluster everyone around it... for all the lip service to a supply/demand market, most of the time the FRR is the rate that everything happens around and your method of picking it makes it slow to react to upward movement but faster to react to downward movement (longs become more in demand => FRR wall absorbs all the extra demand without raising rates for absolutely as long as it possibly can, longs become less in demand => traders cancel their more expensive swaps and the average rate craters).

I feel like the impression you're getting of everyone just wanting higher rates is a result of the simple fact that people who want rates held low have nothing to complain about because the system we have is already doing that so effectively. You seem a little dismissive on that basis but I'd be wary of setting aside complaints just because the people making them seem 'whiny'. People are always going to complain, and always going to be biased, but it'd be nice if there were approximately equal numbers of complaints coming from both sides.