But this is shifting the ground ... it was framed as not putting it in the hands of the bank managers who had failed, rather than being a balance sheet problem.

It is shifting the ground back to the question I asked, which is not in your frame.

I don't see ... how the new capitalization to allow newly established banks to lend somehow free of interaction with existing banks and their crappy balance sheets is any different from the re-capitalization of the existing banks.

The difference is the taxpayers get the benefit of new credit to the economy without first having to pony up the capital to "recapitalize" the existing banks.  It would have the advantage of offering a clear view of what is the necessary cost of winding up an insolvent institution and insuring that the public does not bail out stock or bond holders. It would have the added advantage of creating new, healthy institutions that could buy up viable assets of banks that could be allowed to go out of business due to insolvency.

If, other than those trivial practical differences, there are no other significant differences, I will be very pleased.  I see no reason why this scheme could not enjoy all of the advantages enumerated in your last paragraph while administering a healthy dose of "market discipline" just where it will do the most good.  

"It is not necessary to have hope in order to persevere."