It appears to me that your main problem with the rules at the moment is that people exploit them.
No, it's not just the possibility of exploiting it. As I said before, getting an investigator devoured is oftentimes less harmful than getting him/her insane/unconscious (an example will follow). It just bugs me too much. I give you that simply house ruling it would be the easiest way, but as the comments on this forum clearly illustrate, I'm not in the minority in this - of all the experienced players of Arkham Horror I know, the vast majority of them share my opinion that getting an investigator devoured mid-game is rarely a big deal. Thus, my request for the official rule change - it is better than having everyone house rule it differently.
Think of this example from a game I played a couple of months ago: Due to horrible luck with dice, Amanda Sharpe got devoured in R'lyeh. She had a .45 Automatic, a Gladius of Carcosa, a Find Gate Spell (which she had failed to cast) and the Ruby of R'lyeh - rather good equipment, but nothing "extra" (she had used Food to stay conscious on the previous turn, though). She didn't have any money, and she used all her Clue tokens to avoid getting devoured, to no avail (really crappy rolls). She also had one gate trophy and some monster trophies, worth something like 7 toughness by now (she had just beaten a Gug on the previous turn).
So, the weapons, the spell and the Ruby were lost with Amanda, and a new Investigator now emerges on full health and equipment - plus all of Amanda's Trophies! A turn later this new Investigator has already become the Deputy and is on his way to the Curiositie Shoppe to spend his money.
Now, had Amanda gone insane or unconscious instead (Madness / Injury cards were not used in the game, btw), she would've lost two of her items, leaving her rather poorly equipped. Also, she would've gone LiTaS and spent her next turn there. Then she'd have returned to Arkham, dangerously low on both Stamina and Sanity - and no money to pay for treatment. So she'd had to waste several turns and possibly her trophies just to get back to full Stamina and Sanity - not to mention she'd have way weaker equipment than the Investigator that replaced her.
Can you see the discrepancy in those two situations above? The latter is multiple times worse than the former - and it should not be so! There are times when getting an Investigator devoured is bad, but as long as there are times when the players cheer when an Investigator gets devoured it feels like there's something wrong with the game. It makes no sense that the replacing Investigators are basically always stronger (as they get all the trophies of the previous Investigator) than those that started the game originally were.
Having an additional Doom token added to the Ancient One's Doom Track whenever a new Investigator is brought in to replace a devoured one feels like the bare minimum for me. Another option that I hadn't thought before would be that every new Investigator brought in mid-game would start with one Madness and one Injury card.