First of all, waiting a turn is very thematic, since Gandalf did not meet up with the leftover fellowship until about 3 weeks later. Meanwhile he was floating in time space continuum. A fallen wizard might be off wandering until he composes himself again, like normally characters failing a check are discarded (going home), but may come back.
Second, it’s quite a useful thing in game mechanics. Indeed you come back renewed (unwounded), so for that reason alone I would keep it that way. Also you can’t reward a wizard taking risks by letting him still do stuff in the site phase if he fails. Of course that could be phrased differently, like “may do nothing this turn.’ And I still feel the allies he controls must be discarded if he goes fallen, which is more intuitively accepted if you keep him off to the side and not just with the company (though indeed this is minor).
But even so, if the wizzz is absent, that opens some possibilities for the opponent, so it might actually be a funny thing to keep around. Opponent can go for the influencing of a character that would be under control of the wizard normally. Wizard can’t play spells anymore to protect influence attempts or attacks. There might be other possibilities to take advantage of such a ‘window of opportunity,’ though none really big come to my mind just now (riddling is always better if his sage is gone, you break up fellowships, etc.)
Now, I really don’t understand the commotion. As the rules currently say; you flip him first, then place off to the side. I don’t believe any of the fallen avatars state that it must be he himself who fulfills the condition, so when you play the whatever he needs in the same turn, afaik, even though he is not with the company, you can still flip him back. Ok it says ‘off to the side’, because you cannot use or target him, but I would say that flipping him is neither of that. Otherwise I will make that a clarification.
Nb, the rules do also state currently that a fallen wizard is -5, right? And also that it may only be done once. So I don’t understand why this proposal would be anything new?
I think the play of Sacrifice as intentionally flipping your wizard is fine, and you don’t need to alter the rules for it, though of course it must be made clear that this is what SoF does…yet another clarification on the list. Personally I just didn’t include it in the deck, saw no reason for it, but come to think of it, it’s actually an interesting strategy to actively look/trade in advance for the resources you might need to flip back, and then sacrifice yourself…

Stone-age did not end because man ran out of rocks.