There are a few problems with this idea.
1. Paladins don't need another way to gain MP. They have Riot Blade, which also already carries the risk of losing aggro because it's not producing as much as Halone.
2. Paladins are tanks. No tank should ever have an ability that explicitly lowers their aggro. This literally goes against their purpose of having more aggro than anyone else(except another tank if they're OT). Please note that the Tanks are one of few jobs who don't have access to an ability that reduces aggro. The others are Scholar and Monk. Scholar has no problems with aggro anyway, and I like using Monk's lack of one as possible evidence that Pugilist will have a Tanking job someday. Besides, Monks rarely have problems with aggro because the first few seconds of a fight, where all other DPS are capable of bursting their little hearts out and stealing hate(and thus use said hate shedding abilities during the initial burst), are the seconds the Monk has to spend ramping up to full power... so aggro really isn't an issue because the Tank has established good hate before they reach full damage.
3. Shroud reduces aggro by half. This means that on those little aggro meters on the party window, anyone who is over halfway full on their meter will have more aggro than you when shroud pops. In most situations, this will be the case and any situation with more than one monster losing aggro will likely cause a wipe. We don't want to give anyone a "press this to wipe" button. To put things simply, there's too much risk for too little reward. No "normal" situation calls for that much Flashing.
4. You're making a suggestion to prevent Provoke from being required for Warriors as a cross class skill... that requires Paladin to have their own necessary cross class skill that
needs more leveling than Provoke to obtain. You're trading one evil(explicitly required cross class skill) for a greater one here. Besides, Warriors will still need Provoke for all 4 man content and a Paladin with Shroud should never need it in 4 man content, so the initiative doesn't solve this issue at all.
5. A Paladin emergency healer would need to be able to make itself immune to interruption in order to be effective at all. Unlike other games that give Paladin effective heals, spell interruption makes it incredibly difficult to tank and heal at the same time