You're right in the regard that Fripp's released so much product, practically all live, to keep the cash flow going(as opposed to selling huge amounts of one title, and we know that ain't gonna happen), but due to the nature of the band, and the nature of the fans, it's no surprise. It's no different from some Deadhead owning(and listening to) hours and hours of "Darkstar". I was at that Orpheum(L.A.)show, and the overwhelming experience of seeing them live can't quite be translated to recordings; I don't play that album that much.
As for Jakko, yeah, he isn't as forceful a singer, but he ain't that bad; consider that as a person/musician, he just fits what's required of him. He was already in the Porcupine Tree orbit, having done a project with Steve Wilson, and as there has been a mix'n'match/overlap personnel thing going on between members of Crimson, Porcupine Tree, and the British group Japan(with Bill Nelson in there as well)for some time, it was no surprise. After all, he had been fronting that 21st Century Schizoid Band outfit, which was basically KC's current model of alumni reunion but without Fripp's involvement, performing the back catalog. Maybe it's just down to his personality. It could be that, after Belew, Fripp just did't want any more clash of wills. I say that knowing what an obstinate pain in the ass Fripp can be.
Fripp has worked with plenty of strong vocalists before---Daryl Hall, Peter Hammill, Japan's David Sylvian, even wifey Toyah(not to mention Peter Gabriel), but all of those endeavors were their own beasts. None of those people would really suit Crimso's oeuvre, and their style might distract/overshadow what the band is about. Plus, how much vocal fits into the band's instrumental improvisational nature anyway? What I think would be fitting, interesting, and maybe something fresh for the band, is if they brought in Petra Haden to do vocals(plus she plays violin). She obviously has the chops...
But then, she's been busy singing for Bill Frisell and The Stooges' James Williamson lately.
Did you know, back in the day, Elton John and Bryan Ferry auditioned to be the Crimson vocalist? How weird would that have been?