Couple of thoughts from south of the border:
Ultimately, you can't fight physics. With what seemingly were bad assumptions on the noise environment (or selective deafness to those who were trying to warn them), the FCC's propagation analyses underestimated what RF power would be necessary to replicate analog coverage. Additionally, with less noise, co-channel and adjacent-channel interference became more important, further putting limits on RF power.
There are precedents for accepting higher predicted interference in US broadcasting. Local AM stations (old Class IV, now Class C on frequencies like 1230, 1240, 1340, 1450, and 1490) started out as 250 watts full-time. Eventually daytime power was raised to 1 kW and stations had to accept any interference generated by such a move (in fact, Class C allocations are still made assuming 250 watt operation.) Finally, in an attempt to fight increased local noise, nighttime power was raised to 1 kW.
If VHF DTV power is raised with the acknowledgement that there will be more interference, it will take a while to figure out just how bad things are. From my casual review of filings where VHF stations have requested more power than would normally be allowed, predicted interference has rarely, if ever, shown up in measurements. So, one outcome might be improved urban (indoor) reception with some compromise to fringe reception, with that compromise to be determined later.
Trouble is, this is a really crappy way to re-do allocations.