Well, I'm a submenus supporter, so I can't agree with you on everything...
I agree with these three points:
1. Lots of empty space
3. Lack of organization with items.
4. Lack of picture representation
These are the first features I customize everytime I make a new project.
5. Hate the fact that you can't see basic info such as gold and playtime from any submenus
Well, if I have to be honest, it's pointless to see them elsewhere...
In skills window or item window, I don't need to have playtime or gold displayed...
2. I feel as if menus that take up the whole screen "take you out of the atmosphere"
I have different ideas on this point. I feel a menu is something that has to pause action for a moment, and take a long breath.
Something that let you reason without having visual contact with what is happening, with a sort of detachement.
I'm not for CMS, I found it quite... officious.
Thanks for having expressed your ideas, however