I agree that the original P2 was a classic design and is far more attractive than the Bugatti-nosed versions. However, I do still like the look of the later styling which combines sleekness and power. I take your point though Larry, it doesn't work as well as the complete streamlined package of the A4s.
I suspect the P2s were not reallocated further south simply because the existing pacifics were already doing a good job and Gresley had come up with a superior design in the A4 in terms of their suitability for high speed running and more than adequate haulage ability.
It seems to me that the P2s could have been developed into effective east coast mainline locomotives, after ironing out the pony truck problems perhaps, but they were simply superseded by something that was a better fit to the requirements. There is evidence that further 8-coupled designs were considered but, presumably, not deemed to be the best fit for the intended purpose.
My feeling is that, as CME, Thompson was itching to design a front line pacific and, without the budget for a completely new build, was searching around for something to rebuild which would be palatable to the board. He then hit upon the P2s (based on the A3 boiler after all). I don't think Thompson's design is attractive but there are plenty of people who do. It looks fine but the cyclinder placing seems odd to me. There is evidence that Thompson's desire to simplify some aspects and innovate in others could bear fruit in times of tight budgets and lower maintenance schedules (e.g. his B1, rocking grates on pacifics) and you're right they did last albeit not as long as other LNER pacifics. One wonders though whether he was looking in the right area? Cook's focus in BR days on greater precision in the workshops seems to have been very effective in ironing out problems on all of the pacifics.