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King, I completely agree with you about the timeouts. If players are allowed to bail themselves out with a timeout, they shouldn't get so many of them. They already get 5 TV timeouts per half. Make it like the NFL: 3 per half, period. That way, they actually have to budget their timeouts and use them wisely.
I'm a little more ambivalent about the foul trouble issue. On the one hand, you're right that taking a player out now guarantees less time, whereas keeping them in gives the possibility of less playing time. On the other hand, fatigue often plays a large roll in a player's ability. Taking them out immediately when they're in foul trouble gives them a chance to rest for a few minutes. If they have to rest, might as well use foul trouble as an excuse. In the end, it's probably more about control. Coaches would rather have the option of putting players back in when they want to. They don't want to lose that option. "Don't tell me that my player can't play anymore. I'll take him out just to show you!" It's illogical, I know, but on some level I can understand the impulse.
Incidentally, I remember during the Olympics a few years ago the American announcers talking about how the European coaches don't take players out when they get in foul trouble. They made it sound like it was a very curious habit, like professional athletes who smoke (also common among the European basketball teams.)