I think Chip is asking some reasonable questions.
First, ERAS. I certainly agree that one of the best ways to drive innovation in the technology sector is through competition, and another application service would most likely do that. However, there are some downsides. First, either you'd need to convince programs to use two+ different application systems, and all the pain that causes, or applicants would be forced to use both systems to apply to various programs -- that would be twice as much work for applicants, and perhaps end up being more expensive. If a new service were not to charge applicants, they would need to get funding from somewhere. Would you be willing to have all of your private, vital information owned by a drug company. or a marketing firm, for free applications? Everything we use costs something, somewhere -- sometimes you just don't see how you pay for it. Overall, I do think that a competitor would be nice and would help drive competition, and I think the same service could be delivered for a much reduced price. And if I were to set this up, I would have some money flow to programs per application. In fact, I've got some coding skills, and I can see how this could be done. If you've got no plans after medical school....
Second, the match. This is a more complicated situation. As mentioned above, imagine getting an acceptance to medical school early that states that they have offered more positions than they have in their class, and that there is a $10,000 non-refundable deposit to secure a seat, and when all seats are full all remaining offers are void. For good, competitive residency programs this is exactly the type of scenario that will/has developed (not with a deposit, but with early contract offers that are short lived, and the contract may have a financial penalty if you try to cancel it). The reason this all happens (and the reason residency is different from a regular job) has to do with the following:
1. Residency currently runs on a Jul 1 - Jun 30 schedule. All of the spots open up at exactly the same time, rather than being spread through the year
2. Residency programs are highly regulated as to how many spots they have. If I'm approved for 10 spots per year, I can't have 11 people. So I can't "overbook" like airlines do.
The residency schedule is simply a result of med schools graduating in May/June. It would be possible for residency programs to change, so that they have new interns starting 2-3 times per year. This makes some things more complicated, as residency is an educational process in addition to a job -- so it's easier for me to deliver a standardized curriculum if everyone is in sync with each other. But it could be done, and would decrease the need for a match. The training slot issue isn't easy to address, but one could argue that the ACGME could be forced to stop assigning a specific number of slots to programs, and simply assess the quality of training -- if a program takes too many residents then the quality would drop and the ACGME would intervene.
All of these changes have downstream effects that are good and bad. Having 2-3 start dates through the year generates more flexibility for applicants, and generates a more diverse workforce for programs (i.e. not every intern is new the same day). On the other hand, it's possible med school grads could get an offer to start at one program now, and a better program in 6 months (and you would presumably need to pay your loans during those 6 months). Loosening rules so that programs can expand at will could create a problem with poor programs expanding like crazy, and then when they get into trouble residents might be tossed out and screwed. Whether this is good/fair is all in the eye of the beholder.
And I think that's the bottom line -- if you change the rules of how people obtain residencies, you will create winners and losers. Some people will do better, and some will do worse in the new system. A free market system might help people who are very focused on a specific location. A free market system might drive up salaries as residents would be able to play offers off one another. On the other hand, I could imagine offering one spot to three people and having them bid on how low their salary would be. Measuring the "goodness" of the system is very complicated. You could average each applicant and program's happiness. You could look at the % very happy and/or %very unhappy.
TL;DR version: Competition for ERAS as an application service would be a good thing. Given the current structure of residency training, the match is the best option. A non-match solution would require many other changes.