I think nothing must be changed in the present procedure.
1) We send a paper to a journal when we think that the paper is ready for publication, if it is not, we don't send it. We spend more time on it, if necessary we left the paper 1 or 2 weeks in our drawer before sending it, just in case.
2) Once the paper is in the hands of the referee, the referee judges a work assumed to be complete, not a draft. If it is not accepted the first time but may be improved, it's referee's job to tell what to do and the journal board's job to be the intermediary.
2) After one or two rounds the paper is definitely accepted or rejected. That's the way it works.
The referee is not a teacher, he is a peer and judges as a peer.