Engines,
Actually, the "oversized fan" made the RB Pegasus a very efficient (medium bypass) engine in the Harrier role and in achieving its hover power requirement. I would also suggest that the placement of the engine in the middle of the fuselage of a combat jet like the Harrier probably MINIMIZED its structural weight! Placing engines at the extremities of an aircraft structure can increase structural weight due to the extra strength needed to be built into large parts of the aircraft that do not need to be so strong for aerodynamic or other loads. Weight penalties of tail mounted engines on large-ish narrow body aircraft spring to mind.
You are right though, compromise, and the RIGHT compromise, is the key. Trouble is, maybe they have got the cost/effectiveness compromise of the F35 badly wrong?
OAP