Mountainbear,
Your point 3) the vs didn't increase by 1000 fpm it increased to 1000fpm, anything greater than 1000fpm is by definition unstable and requires a go-around if below 500'.
1000 fpm on final is not completely unusual, but it is on the limit, but OK to continue. The 737 800 has enhanced EGWPS, with predictive windshear, both systems to avoid WS microbursts, the wind on the ground was 120/6, although there was a localized shower in the area. Nothing on the FDR indicates microburst. When you have been in a microburst it is not something that gives you some vague feeling of unease, you very quickly know that things are not right, bigtime. The Lionair management made a statement before the wreckage was cold that weather played no part in the disaster, that is a very unusual thing to do.
bottom line, if a missed approach had been carried out when visual reference was lost @ 150 (something that must have been anticipated by the F/O's statement at 900'), we would be making comments on another thread.