3, wrether intentional or not, should be removed. AoD is supposed to be unfair, but not THAT unfair. It also kind of beats the purpose of difficulty levels, since all of them are nothing compared to Nightmare, even if it works just like ITYTD with monster respawn.
This challenge serves a useful purpose. In addition to being different and challenging in its own right, it's as you said - N! is far and away harder than any other difficulty. Turning on one of its difficulty enhancers does not defeat the purpose of difficulty levels in AoD -
removing this feature would defeat the whole purpose of AoD. If respawning monsters were removed, it would simply be 'play through DoomRL with slightly less vision radius', an easy challenge where you skulk in corridors and smaller rooms rather than risking wandering around big open spaces, instead of a hard one where monsters respawn like on Nightmare!
There are many, many, many ways to make sure a monster is dead and/or gone. Kill them on doors (lol), kill them on top of other corpses (they don't stack), knock them back with a shotgun or rocket or something and into water/acid/lava, or blow them up: kill them near walls and dodge a fireball or shoot a rocket there, rocket jump near them, get hit by an imp while adjacent to them (preferably they'll hit another monster, but doomguy will often have to do), direct hit them with lots of explode, hit something with a rocket that's within spitting distance of a corpse, push an ever-present barrel close enough to gib them, use a skull if you're desperate... respawning monsters is starting to sound not unfair enough. (As for 'gone', press '>' on a staircase. AoD
does give double xp, and not every game has to be a YAAM.)
You can play AoD to get used to the monsters respawning bit first, and then when you're good at shooting down things you can't see and double-tapping their corpses, you can go on to N! in some other game, trading your vision back for faster, more aggressive phobos 3 hell knights.