Pretty harsh criticism of Gatland. Joe Schmidt I genuinely like (either way it would be a kiwi as coach), but I do think you have to select an international coach to coach an international team. Schmidt has done very well for Leinster, as Gatland did extremely well for London Wasps - it's still very difficult to say how well that translates to international form. Declan Kidney won the H-Cup twice with Munster, and he's an average as hell international coach. There's very little doubt Leinster would do no better than Wales against the All Blacks, Springboks and Wallabies.
I disagree that you have to appoint a current international coach as the Lions coach. And that appointing a coach of a club team is not worth trying, given there is no history of it to suggest it is a bad idea, and the previous appointments of national team coaches has resulted in three successive tour defeats.
In fact, after Henry (current Wales coach in 2001) coached the Lions, Wales were diabolical the following season and Henry was sacked. After the 2009 tour also Wales weren't at all great in the following year or so, and some even wanted Gatland out at one point (don't pretend now there wasn't a few who were saying that).
So I fear Wales' progress will be hurt by this for a start.
Also there is a lot of doubt that Leinster could have won more than one match in 19 attempts against the Tri Nations. England, France, Ireland and Scotland all done better against Tri Nations than Wales under Gatland.
Finally, Schmidt is different to Gatland and Kidney. He transformed Leinster into the best side the Heineken Cup has ever seen, much better than Kidney's Munster was. Also Munster had a specific Munster-style of playing, which many have felt wouldn't suit some the personnel of the current Ireland squad, and he has shown he isn't very adaptable and Ireland are underachieving.
Schmidt's Leinster is adaptable to more than one game plan which is what makes them so special (and better than Gatland and Kidney's teams).
The options were
1. Warren Gatland - Recently choached Wales to a 2012 Grandslam and 4th in the RWC.
2. Declan Kidney - Recently suffered the worst loss in Irish rugby history with a 60-0 scoreline against the All Blacks. Loss in QF to Gatland's Wales.
3. Andy Murray - Other than a fluke victory against a second string Australia in torrid conditions, nothing really of note.
4. Stuart Lancaster - New to England job but in my opinion is about as creative as an automatic door.
?
Not really left with many choices, and I think Wales have actually looked quite dynamic of late. Shoulda ask Graham Henry again, he seems to up for just about any job lately...
Now you mention Henry, I would prefer him to Gatland. He knows how to beat this Australia side, would have no bias towards his own squad (like Gatland will do) as he hasn't coached most of the players, and would be able to reflect on the mistakes of 2001, just like he corrected the mistakes of 2007 for the All Blacks.
