Is there a "fairer" system that could be applied and replace the existing FFP rules?
I think it depends on what the end goal is, and this is what should really be decided once and for all: Is it to ensure overall spending is sustainable - including everything outside the first team (facilities, staffing, etc.)? Or is it just to curb spending on players, so clubs don't bankrupt themselves trying to build a trophy-winning side?
If it's the former, then the current system could work, though it needs to be tweaked considerably. For instance, the amount of allowable losses has to increase over time to account for inflation. Absolutely mind-boggling that it's not already been indexed that way. And the powers-that-be have to be willing to properly investigate and punish Man City-style fraudulent gaming of the numbers (ha!). And as has been spoken about plenty on here, there has to be a better way to handle double-jeopardy situations, where a really bad single year causes multiple breaches due to the very nature of a multi-year cycle counting at least some years twice.
If it's the latter, though, then this system is nonsense. As I saw someone post on here a while back (can't remember the poster or thread, exactly), this is one spot where American sports leagues like the NBA have the right idea: a luxury tax system. Basically, you set an amount that everyone is allowed to spend on transfer fees, wages, etc., and then if you want to spend more than that amount you can, but you have to pay something like 50% tax on whatever you spend above the set allowance. And that tax is then distributed to the other clubs to help maintain competitive balance.
But overall I think that's a huge part of the problem - the current system is confused as to what its purpose should be, and no one's bothering to do the hard work of really figuring that out.