I don't remember the play, but if he stuck out a leg and he was anywhere the keeper had to be concerned, he played it.
The offside rule creates the empty space into which attackers can run in the first place. Without the offside rule the play which was described as beautiful would not have happened in the first place. It would have been more beautiful had they timed it correctly. See Australian football for an example of a sport without an offside rule and the positioning of players it would tend to encourage.
I don't think IFAB or USSF would agree with you. Theofficial interpretations from the I&G are: If he did not touch the ball, he did not intefere with play -- an attempt to play is not a play. The keeper being concerned is not part of inteference with an opponent (until a year or two ago the meaning of interference with an opponent was broader and included action that distracts an opponent). The possibilities on the play in question are: the AR thought the player touched the ball the AR thought the player was close enough that he challenged the GK for the ball the AR thought he prevented the GK from making a play by blocking the GK's vision I think the first two are the most likely. (I also think the flag should have stayed down -- but this is one of the parts of the OS law that can be very hard for an AR, as the angle can make it difficult to judge.)
Klose was a good 6 yards away from the GK, so its hard to say the challenged the GK from that distance. The flag should have stayed down under any modern interpretation.
But... but... a penalty kick is far too harsh a punishment for some of those offenses, like if the player could never get the ball in the first place, or he's out at the edge of the penalty area... Oh. Sorry. Wrong thread. But regardless of where you draw the offside line, it's arbitrary, and there will be mistakes on close plays. Even if you require daylight to be off... or one foot of separation, or one meter. Arbitrary. The OP wasn't talking about those. We're talking about a complete rule modifications. But as others have already pointed out, the offside law has been liberalized significantly over the past 150 years or so to favor attacking, and other experiments have been tried, and none found to be significantly better than what we have now. And... you know what? Even referees sometimes hate to have to call back a beautiful goal for offside. But it has to be done.