I agree that the hat does not mark a meaningful spot. With O2O, we could inform the other officials after the play that "82 went out of bounds during the play on his own". With that information, we might then be able to throw a late flag.
However, how would we communicate that to the other officials and to everyone else if we do not have O2O? Right now, coaches see a player catching the ball, but the official's hat (and/or a flag) is on the ground. They might know that the play is coming back, so the hat does have some purpose even if it isn't marking an exact spot. I agree with you that dropping the hat is a pointless mechanic, but what would be a good replacement for it?