Really great write up /u/Trilandian. I never played EU a single time before watching Beagle, NorthernLion, Marbozir, and Gopher get brutalized by Long War. I was so intrigued by the passion that everyone felt/feels towards LW that I went on Steam, purchased XCOM, and the DLCs, and then downloaded Long War Beta13.
Quite simply I was completely wrecked during my first 5 attempts, and it wasn't until I had 100+ hours under my belt and started editing the ini in an attempt at making the game easier that I came to the same realization as you. Essentially I was lucky because I did not have bad habits carried over from EU/EW, so by making my own tutorial system I was eventually able to reduce the number of times I fell off the cliff that you are describing. It has been a very long, sometimes frustrating, but ultimately rewarding journey, and I would not trade the months of time IRL that I've spent learning how to play this game for anything.
This was/is the main motivation for my Long War 101 series. Up until now the mod was simply too punishing for anyone who was not willing to dedicate hours to study the wiki, read through /r/xcom and watch hours of the Let's Play on YT or Twitch. That should be changing soon, both through /u/eclipse666's INI tweaks and the work by amineri and JL towards a "Beginner/Basic/Easy" difficulty level. I think that these changes will go a long way towards reducing the frustration felt many new users as they attempt to get some experience learning the game. In the end I feel pretty strongly that the game is simply too good for people to walk away from out of frustration.
In addition to my N/H DW campaign using /u/eclipse666's mod, I am currently playing a Classic/Honestman Beta15e campaign with only one second wave option (CC) and no ini edits. I must admit that this is a challenge on many levels, because I am really having to think things through like never before. I would sometimes watch /u/beaglerush and think "OMG, why is this decision taking so long", and now I know. One wrong move and your campaign can crash and burn in seconds, or even worse, one wrong move and you don't know that you've made a terrible mistake until a month later, your barracks is a shambles and you are desperate for Alloys and have no way to get them.
I am pretty sure that the changes coming to difficulty levels, and second wave options will go a long way to addressing the issues for new players, without impacting experienced players negatively.