Here is how ridiculous it is in play. We are level 1. We are negotiating with a Level 1 BBEG on a ledge where a rope is hanging from where people can climb up. He is insisting we drop our weapons or he will kill a hostage. The party is trying to move into advantageous positions. During the negotiation, I say. I run to the rope and climb up. DM: Roll for initiative. My initiative is that I go 4th.
BBEG goes first. Our cleric goes second, rogue third, me 4th. The group (Cleric), Out of Character, groan and say that we could have used diplomacy/deception to diffuse the situation and now we have to fight. BBEG goes first and Stabs the hostage but she is still alive. Cleric: moves up the rope to attack. Rogue: Shoots the BBEG with a bow hitting him for a lot of damage. ME: (I cannot get to the rope because the Cleric is on it and I have no range weapon so I have to do nothing or cue up to climb the rope) So, I say that I am going to use diplomacy to try to diffuse the situation.
The DM Says, no, you said you were going to attack. ME: I say "But I did not attack" and in game, make a speech about how we can all work this out and no one needs to die and I chastise the cleric and rogue (who both wanted to use diplomacy).
DM says that combat has already started and my diplomacy fails.

That is how ridiculous the initiative system is now. If you loose initiative, combat starts and the thing that caused the initiative might not ever even happen because, if you loose initiative poorly enough, you may go last to perverter results, like in the above example.