Re: What was Mark Waid's issues with the 1986 retelling?
"Batman did outsell Superman in the '60s from 1966 to 1967."
Batman magazine outsold Superman magazine from 1966 to 1967. Even during that run, Superman related titles vastly outsold Batman related titles when taken in their entirety. Superman held more market share than Batman, before, during, and after Batmania.
I really don't know what point you're trying to make here. Silver Age Superman which dominated the '50s and '60s, despite blips here and there, was vastly successful in terms of comic book sales. I think it's a fair question asking why exactly that needs to be run away from?
Certainly, I don't think even Byrne ran away from it entirely. Even in retrospect, Byrne acknowledges the damage of removing Superboy, which preceeds the Silver Age btw, from the LoSH. And, really, if we're going to take shots at Kingpin Luthor, by most accounts Marv Wolfman is where we should be pointing fingers, Byrne just ran with the idea. Certainly, Brainiac is a Silver Age villain nobody has a problem with retaining.
I certainly agree that updating Lois Lane's characterization from the Silver Age schemer was something that can't translate to modern storytelling. That said, All Star Superman is certainly an example of how the Silver Age tropes can translate to modern storytelling. I think the main thing is just not to make Superman mopey and ineffective, but someone able to meet big challenges with a sense of hope and even a sense of humor.