Dick,
I agree with the fact that if the pilot had been advised of his track error the accident could have been avoided. I say could not would. Obviously some very bad errors were made or equipment failures caused this accident.
In the end though you just can not fly below your msa without being absolutely sure of where you are and you can't be sure unless you have multiple sources of information. If ATC have radar that is one possible source, so is a DME, VOR, NDB, IRS etc.
I have flown too many Radar controlled airports around the world where I still don't descend below the MSA until I am sure of where I am, and not simply by the controllers advice. It is the only way to stay alive in this job.
I feel that to connect the need for more class E airspace to this accident is a bit of a stretch. There are a lot more things that can be done to prevent a repeat of this kind of accident that would be of more benefit before calling for more E airspace.
We can't positively control the whole of Australia by radar so the focus for this accident and for other remote areas needs to be on procedures, training and equipment required on board IFR aircraft.
Will class E airspce help? I don't know, but I do belive that it probably isn't the best way of preventing the above type of accidents.
Cheers.