Knc, I think he meant "into the crosswind". Furthermore, I think he was discussing a winch launch, where 200' is kinda tricky.
I just posted my exam paperwork for the GPL to the authorities, so I don't have a lot of experience in gliding, but IMO the bit between about 150' and 300' is the most tricky part on a winch launch. You don't really have enough altitude to do a proper, abbreviated circuit, you are already nose high so you need to shove the nose down quite hard before you have the proper glide attitude and visibility, and a lot of runway has already disappeared behind you, leaving you with very little room to land ahead. Landing downwind might be the only option indeed.
On the two aerotows I ever did, we only reached 200' when we were miles from the airfield. No way we could have made it back, but there were plenty emergency fields to choose from. I have not done the calculations but it seemed to me the ascent angle of a DA-20 with a fully loaded ASK-21 in tow is less than the descent angle of the fully loaded ASK-21 on its own. So unless the tug/glider combination somehow circles back to the field during the tow, there is no way the glider will make it back to the field in case of a rope break. Unless the glider manages to find lift somehow, of course.
Back to the original topic - my last simulated rope break was just last Monday. At the club where I learned gliding it's standard part of the checkout procedure. Normally done at 300', which is adequate, but not ample, for an abbreviated circuit.