It sounds like everyone loathes FD, but that FD does do a good job at final formatting. So no one wants to write on FD, but they feel compelled, because of its adherence to the standards, to use the formatting functions of FD. Is that right?
It's more of a production issue. FD has (and works well with other apps that have) a lot of features that make it easier for producers to break down a script -- to figure out the who/what/where of the script so they can assign dollar amounts to those elements and budget the movie. That's what makes FD the industry standard. (This is especially true of the "indie" film world, where smaller producers are budgeting all by themselves.)
might it not be possible to set up a template in another WP, such as Mellel to do the formatting? Or even to find someone who's interested in writing a formatting-only app to do something along these lines?
If formatting were the only issue, FD wouldn't have such a stranglehold (especially in a PDF world that makes file format a non-issue). Screenplay format is essentially just tab settings. The standard format that Final Draft spits out was created on manual typewriters, and you can set up pretty much any word processing app to emulate it. Because there are so many of these little formatting things, writing a properly formatted script in Word, say, is a pain in the ass without FD's shortcuts, but it's certainly possible. There are templates (not to mention other apps -- Movie Magic Screenwriter, Celtx and Mariner's Montage among them) all over the web that can help. But FD is what most people have, and it's what most producers use.