From safety and criticality point of view you are absolutely right, I also agree that safety in flights should be the first concern, but at the same time it questions that if other mean of communication was available in Malaysian 777 then they might have been able to communicate with world. On ground these communication networks are co-existing with other critical services, even in smart vehicles they are working with cell phones, again you are right as on the conditions today but testing of co-existence needs to be get started, I think still it will be a very late start.
At least in the US, the flight operator (airline) has no choice. This is a policy set jointly by the FCC and the FAA, It has been that way since BEFORE cellular technology was in place, but then applied mostly to other radio equipment in termas of not being allowed to be on anytime during flight. It has NOTHING to do with technology limits, just erring in favor of in-flight safety, Just because you can think of a way to do it, it would have to be exhaustively tested to be allowed! As a frequent flyer (and an engineer with extensive RF system expeerience), I fully support the current policy (even more so considering the banality of the vast majority of cell phone conversations today; think about trying to sleep on a trans-Pacific flight while the person sitting next to you is nattering away).
Iridium has pretty good penetration in the BizJet market -- but it never took off in Air Transport, due to the lack of Safety Services by the network -- (Priority, Precidence and Preemption ) (To guarantee a distress call gets netowrk access)
A single Iridium phone onboard could've provided information on what was happening, provided that its owner was conscious and able to press a few buttons. There is always a satellite within range, even over the remotest parts of the Indian Ocean.
Still today flight operators insist to switch off the mobile phones while in flight, on the contrary it needs to provide the connectivity while being in flight, there are very nice filtered are available for filter the mobile phone traffic signals from control circuits.
There's 2 transponders on all commercial aircraft with a dual control head in the cockpit. Circuit breaker or simply turning the unit off is possible anytime the pilot wishes. The control head allows selecting either system if the other fails. It's also tied into the TCAS system. It would be possible to relocate the breaker and tie the power sw into the air / ground mode system leaving the crew the only option of switching between failed units. They could always physically destroy the control head which could cause it to stop transmitting. Bottom line is the pilots, mechanics are supposed to be cleared and trusted. You can only engineer so much. You have to be able to trust the people in safety sensitive positions. Maybe its time for deeper background checks and reoccurring physiological screening.
If it's a piece of electronics FR-4 used for avionics is required to be self-extinguishing after removal of power -- Flamability is a test all items used on an aircraft must pass -- with the one exception being the fuel - even the lubricants / hydraulics are special for this reason -- even had a charred board where the leads were not trimmed properly find it's way back to me in the lab once for root-cause analysis -- the pilot pulling the breaker stopped the smoke and once they landed they knew right away which unit it was from the residue on the cracks in the cover. If the unit is in the cockpit the proceedure is to don a smoke-hood and oxygen and get the power off and get on the ground -- had this happen to an engineer friend who became a test-pilot for a manufacturer.