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Whatever the advantages of the FA2 over any Harrier II as an fleet air defence fighter, it had two fundamental problems:
- Two different Harrier types in simultaneous UK service when we barely have the budget for one. - More limited A2G capability and range than the other type at a time when these became the top priority.

Aah but Nathan the FA2 had more A2G capability than the GR9 has A2A. Perhaps it could not lay down huge clumps of dumb 1000lb'ers with pinpoint accuracy...but no-one does that anymore anyway because of collaterol effects. You'll see plenty of images of USMC AV-8B Plus's on ops carrying a single 500lb PGM under one wing and a targetting pod under the other and thats pretty much it!.

You want an FA2 to have a precision strike capability, in h'n'h conditions, without adding uprate engines?. You buy lighter ordnance!. 500lb JDAMs off the Yanks, GBU-38 IIRC - bringback weight exceeded by a pair of 500lb'ers I think not - save for the most extreme circumstances!. Likewise Brimstone - a triple rack per wing is not going to tax even the poor Pegusus 106 too greatly in bringback weight terms. Hell sending an FA2 up with just the twin ADEN pods would be valuable in Afghanistan today!. Lastly FA2 could deploy the ALARM missile, leastwise I've seen ALARM rounds under the wings of FA2's, and so had a perfectly adequate SEAD capability which I believe is missing from GR7/9. The possibilities existed to maintain FA2 aboard the carriers in preference to the RAF version - that they were binned was nothing to do with operational capability.

When it is accepted, as you state, that the budget didnt exist to support both types of Harrier (despite official claims made in the 2002 Defence Select Commitee report that it really was a decision taken on capability grounds) the problem must be seen as one of budget and not with the aircraft!.

Although a common aircraft would have had to be optimised for range, payload and A2G, any residual air defence and anti-ship / naval recon capability would be better than the near-zero that we actually have and we would have the airframe numbers to support Afghanistan and carrier deployments

As described above though PGMs are becoming lighter and cheaper. The US SDB (Small Diameter Bomb) is looking like an awesome weapon...its basically a latter-day Mk81 250lb slick JDAM with a wing kit!. Two of these from a single FA2, from 10 miles standoff, could have the same effects on a point target as half of todays 800 sqdn dropping dumb ordnance exposed to all sorts of 'trashfire' anti-air weaponry. The Kongsberg NSM is a 150km ranged standoff missile carrying a 250lb warhead with sea/land capable precision seeker....it weighs a little shy of 900lbs!. There is, and was, no reason whatsoever why the 'common aircraft' could not be truly multirole instead of a heavily optimised striker.