Solo - Play by yourself uninterrupted by any other being. Essentially easy mode and for those who enjoy a relaxing game to wind down or have a bad internet connection.
Open - Play with others. You will get attacked by roleplayers and by those who simply want to kill as many as they can for no reason. You sign up for this experience the moment you click that button. Much more interesting and fraught with danger.
Group - Play with a group of players that fit your style of play. Exist peacefully with interaction from others (Depending on what group you join).
Players being allowed to swap game-modes does not make for a poor multiplayer game.
A lot of people get upset that you can swap game modes yet it isn't even an issue. How does someone switching game-modes affect others? If it's because of players working uninterrupted for bigger ships then joining into open then that's a silly excuse since plenty of players have massive ships already and billions due to balancing issues and bugged refunds. Players swapping back and forth have no affect on you or multiplayer as there will always be players with better ships and players who stick only to open.
Combat logging is getting sorted by FD who have a firm standing against combat logging.
Hacks exist in every game and are also being looked into.
I don't quite understand what you want FD to do? You say they need to choose a side but there are no sides to choose since the only difference between Solo and Open is player interaction. They are slowly adding more content to the game which affects both solo and open, I don't see how they can choose sides?. If you are asking FD to develop only for solo or only for Open then you are essentially asking FD to kill their game since the uproar from the community affected by the loss of attention would be really bad and the bad publicity from it would deter most potential players from joining their game.
I do agree with your point that the game is shallow at the moment. More content is on the way but until then there is very little to do that isn't mindless grinding. The game was released too early in my opinion as a lot of the features mentioned in development still have to be created. Wings, I feel, should have been included on release so the game should not have released until that was ready.
All FD should do at this point is add more content, work on finding a reliable way of catching combat loggers/hackers and continue balancing their game which is what they are doing. They will never please everyone but the game definitely won't end up like a dead donkey if they continue this way.
You win the internet today, well bloomin' said mate.........