YES!
I'll just add that the system *can* work this way *right now* without reform. An editor just must be willing to try and the referees need to say yes.
And in my experience trying this exact thing, it's hard to get the referees to agree to have their words made public...
How I would reform the system:
1. Referees make suggestions. 2. Author revises however they want.
3. Ed makes a final decision, and the referees write the limitations section together.
It’s win win, the authors publish the paper they want, the readers get to see a high quality critique that is normally hidden. Yes the reader has to think for themselves, this is a good thing, we shouldn’t treat articles as sacred texts.
It’s good for science too bc it generates ideas for future authors on how to fill the holes, test the weak assumptions etc.
There’s so much excellent knowledge generated in the conversation between authors and referees and it is all buried and forgotten when the paper is published.