While I agree that the server changes would probably be the most important change the devs could make to the game, changing the engine is out of the question in my book. Changing the engine in an MMO is kind of like changing ATV into a volkswagen, while it can been done and has been done, it requires a massive amount of work. The development of the Crystal Engine itself took about three years to complete and I personally don't see anything wrong with it. The engine can easily render massive areas beautifully with high resolution textures a feat that I have yet to see another engine pull off as well thus far. Because the server response is so bad, we aren't able to even scratch the surface of what the Crystal Engine can do.
As many people have stated the naive decision of making a lot of functionality server sided to combat RMT was a terrible idea. Yoshi is a smart man and I have a lot of respect for him, so I'm confident he shares our same woes about the server issues. Its just not something that can be changed over night and will take while to fix all the issues.