I'm pretty sure there are a lot of people using hydro winches with great success. To say that there's no point to them is pretty ignorant, IMHO. With the right flow rate (higher RPM's) a hydro can be just as fast and faster than an electric but with much more power and without burning your winch and/or your battery and cables up. Let's just say that there are certainly downsides to electric as well, it's not all positives like you put it.
I still don't see why you can't just throw the jeep in N and bump the rpm's to winch much faster and have full steering power - when necessary.
You can say what you want. I speak from experience, which is what my opinion is based on. You speak from......??
Not digging the ignorant comment, and I could get pretty edgy here, but I won't. I can only share from my experience, for whatever that's worth, do with the info what you want.
I would assume that you haven't done much winching on the trail. In most cases you still need to drive the car to get unstuck, even with the winch pulling. If the front tires are buried they need to spin while winching to pop out of the hole, if you're stuck in rocks the front tires need to spin to pop the front tire up over a rock or ledge. With only the winch, and tires not spinning/trans in neutral, the front tires can dig in and the chassis unloads uncomfortably from the pull on the winch and you really stress the front suspension and steering trying to get the front tires to pop up. In most cases the car needs to be driven while winching.
As far as a bigger pump, more pressure won't help, you need more flow. What pump would you use? A P pump would have the most flow, have to figure out how to mount one on a 4.0L. Can be done, what's the cost of a modified P pump and mounting brackets? Then is that enough? I've already seen guys with P pumps (don't know how modified they were) and very large reservoirs not be able to winch while turning. Not a theory, I've been there, and had to get an electric winch vehicle to pull them since they couldn't pull themselves......numerous times.
I have done a LOT of winching. Yes, you can make modifications to get a hydraulic winch to work better. Yes, a hydraulic winch will work great in some situations. But, is it worth the hassle and expense of a good install with upgraded steering parts and the risk that it still won't work in important situations? I don't think so. An electric winch is straight forward, simple, and works well. Yes, you must be aware of winch heat and battery heat on a very long hard pull, so use some awareness and common sense and don't get in a hurry.
So, IMHO, there is no point in having a hydraulic winch.