Even in a distributed, fault-tolerant multi-node system, it seems like it would be useful for the kernel to keep running long enough for userspace to notify other systems of the failure (eg. return errors to clients with pending requests so they don't have to wait for a timeout to try retrieving data from a different node) or at least send logs to where ever you're aggregating them.
Since the mechanisms for ensuring the orderly stoppage of all such activity system-wide are themselves complicated and possibly error-prone, and more importantly not present in a commodity OS such as Linux, the safe option is "opt in" rather than "opt out". In other words, don't try to say you must stop X and Y and Z ad infinitum. Instead say you may only do A and B and nothing else. That can easily be accomplished with a panic, where certain parts such as dmesg are specifically enabled between the panic() call and the final halt instruction. Making that window bigger, e.g. to return errors to clients who don't really need them, only creates further potential for destructive activity to occur, and IMO is best avoided.
Note that this is a fundamental difference between a user (compute-centric) view of software and a systems/infra view. It's actually the point Linus was trying to get across, even if he picked a horrible example. What's arguably better in one domain might be professional malfeasance in the other. Given the many ways Linux is used, saying that "stopping is not an option" is silly, and "continuing is not an option" would be equally so. My point is not that what's true for my domain must be true for others, but that both really are and must remain options.
P.S. No, stopping userspace is not stopping everything, and not what I was talking about. Or what you were talking about until the narrowing became convenient. Your reply is a non sequitur. Also, I can see from other comments that you already agree with points I have made from the start - e.g. that both must remain options, that the choice depends on the system as a whole. Why badger so much, then? Why equivocate on the importance (or even meaningful difference) between kernel vs. userspace? Heightening conflict for its own sake isn't what this site is supposed to be about.
We're talking specifically about the current meaning of a Linux kernel panic. That means an immediate halt to all of userspace.