I think there's a fairly major point being missed here. From what I've read, flight recorder function (particularly with regard to the CVR, but also FDRs to some extent) was not initially proscribed by tech or cost considerations, but for legal/regulatory reasons. In the '60s and early '70s when CVR technology was first widely implemented, pilots' unions and organisations were incredibly resistant to making their presence mandatory - citing potential abuse by employers as a "spy" in the cockpit among other things. What was eventually hashed out was a set of regulations stipulating restrictions, including that CVRs were to be used only for accident investigation by the authorities, would hold no more than 30 minutes of audio on a loop, and that a "bulk erase" switch be fitted in the cockpit to be used on successful completion of a flight. The latter restriction was usually complemented by a further regulation stating that if the "bulk erase" switch was used for any other purpose, or at any other time, the crew would face severe penalties for doing so.
As technology marched on, I believe the only ground given was in extending the recording loop from 30 minutes to 120 (in the wake of accidents where the initiating event occurred more than 30 minutes before impact or landing). Meanwhile, as flight deck and recorder technology moved into the digital realm, FDRs went from recording ten parameters or less to tens of parameters, and by the '80s over 100 parameters were being recorded on new types with DFDRs.
Now I'm not a pilot, but I am a fairly frequent SLF. Heaven knows, if something happened to me as a result of an aviation accident or criminal act, I'd want people to know why. But on the other hand, the restrictions on the use of this kind of data are there for good reasons, and realistically any of these clever potential solutions would need to have their benefits weighed carefully against their drawbacks.
For the record, I remain sceptical of claims made regarding deliberate actions on MH370 - and without wanting to cause offence, I also regard the notion that terrorism is a greater threat globally now than it was before 2001 to be a little overstated. I certainly think that a lot of the changes made to aviation security since 2001 seem to be more about governments wanting to be seen to be doing something - and private agencies taking handsome payments for providing such services - than it is about finding a practical solution to the issue.