I've always ran square sliders. I usually run then "flat". The set that was on my taco didn't have guesets and bent up (not as much as yours, but still) and I beat the living hell out of them, several slips off of rocks taking the full weight of the taco down on slider. They were 2x2x.120.
The ones I made up for my 85 are 2x2x.25 with gussets. The main rail is 2x3x.25 set at 45*. I haven't beat on them much yet, so can't really comment there, but I have high hopes. The scab plates I made up are like dog houses sort of. think of a square with the top 2 corners cut at 45* to make it easier to weld up under the body. I know it's generally a no-no to weld vertical on frames, but I did it anyways, we'll see if I'm dumb or maybe got lucky. Considering that the slider add's rigidity to the frame, I think that whatever stress I've introduced by welding vertical is mitigated by the slider rail.
I'm no structural engineer, but it seems that rotating the legs at 45* should be stronger due to the bend being at the top/bottom. I have no opinion of the scab plates wrapping over the top. I can't think of why it's bad or good. My taco frame caved in slightly as well, but I think a better scab plate than what I had would have prevented that. Mine was simple angle iron welded on the bottom and most of the way up the side, but not all the way. I think making sure the scab plate reaches both the top and bottom bends in the frame is the key.
As for getting rid of the scab plates, I've had to do this a few times (when I cut off the bent sliders on the taco). Like Ike said, grind it off. Just focus your attention on the edges where the weld is. I was successful at taking a cutoff wheel and carefully cut just inboard of the weld and just as deep as the scab plate (1/4" or whatever). Having done both methods, the cutoff wheel was more work than it needed to be (constantly checking to be sure you didn't go too deep). It's a pain in the ass to grind, but it can be done. Get yourself one of the hard grinding wheels (as opposed to the flap disks), it's slower, but better for this sort of thing.
I'm outside your window watching you read this.