Jose wrote:

I think the idea is that the pilot, with sufficient information in a
sufficiently good display and interface, would be able to handle
separation (under IMC) as well as he could under VMC. If this is true
(and I'm not convinced that it is yet), then much of the need for the
IFR system would be eliminated.

I am aware that under high traffic conditions this breaks down (which is
presumably why we have alphabet airspace to begin with)

It's not just high traffic conditions. An airplane can seperate itself
from nearby airplanes but it doesn't have the ability to take into
account the whole system. A disabled aircraft on the runway at say LAX
riplles thru out the whole NAS.