I like the clean “smart look” of the gen 2. The only challenge with having a wifi connection is if the wifi goes down you cannot access the controller. So only basic functionality or an alternate way of accessing the controller (own SSID?) would be nice for these situations.
I recommend that Rachio stay true to their direction. You are off to a great start with a great product. Yes, there millions of controllers to retrofit out there but as you have already seen this transition is not simple with virtually infinite use cases. I think going back to having full control via a panel is a diversion from your IOT/Smart strategy. Basic yes, maybe at the right time. I think it is a matter of prioritization, cost, development time and market adoption as you scale. As much as I would love to have soil moisture sensors I appreciate and admire your reluctance to move this direction too quickly.
The real value and use cases for this controller are yet to be fully understood or exploited. With flow sensors, detecting that you have a broken head or leak is an example of what I would think is a more strategic use case than what goes on the front panel. Stay true to the smart vision.
My 2 cents 