Your statements are absolutely correct and have been communicated that way for quite some time .. it's called 'floor or parity' ...
It's not really a "flaw" in the system .. it is how it designed and supposed to be working ..
In order to be safe against falling prices you will always need to have more then 1x collateral ..
The only thing that you can do differently is .. also allow other kinds of assets to be used as collateral ... much like what MAKER is doing with the DAI on ethereum ..
In regards to "other kinds of assets", if you mean UIA/IOU, it's difficult to determine the value of collateral as well as to lock/force-sell the collateral, if you mean MPA, it will need even more liquidity -- a chicken-and-egg issue.