I have always maintained (as has Dick) that a graduated stepup in services is the logical thing to do.
Nothing>Flight Service/Radio>Tower. He and I diverge when he wants a baggage-chucker Unicom to do the middle bit.
The achillies heel of the current system is the small CTAF, encouraging close-in changes to frequencies, which reduces time to establish SA. As I have said before, I reckon this will be a big player in the Mangalore prang. Had those two aircraft been operating unhindered on the CTAF from further out (for the incoming) I have no doubt they would have known about each other.
We changed from 15nm AFIZ to 5nm because that's the way the yanks do it. I reckon it was political. CASA couldn't say No because there was a vague resemblance to the US system to justify the change.
Now, put Griffo in an office (preferably with a view of the field), give him a official screen with ADS-B traffic on it and Bob's your uncle ~ SAFIS. This looks like an admission that low level E without a tower will be a pain in the @rse and that pilot to pilot segregation is more efficient, but with a monitoring backstop in place. Obviously this would be even better if VFR had...
Low level Class E might have prevented the MNG midair, but it will introduce a major risk elsewhere: that of VFR mixing it with IFR at the field. And as Dick says, the closer you get to the field, the higher the collision risk. The SAFIS goes a long way towards reducing that risk, with everybody being on the same frequency and being watched if not controlled.
The elephant in the room? One controller working only that location and not his overlying 500nm x 500nm sector as well? $$$$