I think the main issue with a lot of powers, is that they no longer do what they were originally intended to do. AoEs were not designed to make mobs scatter, but some of them do now. I can't remember if Ignite was one of them or not, but back in those days it was not a huge issue since AoE Holds recharged rather quick in those days. IIRC, fear was added to Fire AoEs after one of the many attempts to nerf power leveling. I think some powers need to be changed to reflect the current times.
Having said all that nonsensical crap, I do agree with you, but I would rather see the fear removed. Most people who catch on fire in real life collapse to the ground, they do not have the air to run around since the fire takes all the air before it can reach their lungs, so they collapse and burn that way. Even though real life simply cannot be applied to this game in any logical way, it still makes sense. Perhaps a stun effect in place of the fear effect? They would still walk around aimlessly, but they wouldn't walk far in that case.