I just listened to the panel you were on at Fordham, and I wanted to note something regarding one of the questions you were asked -- namely, the one concerning "celibacy as a sanction."
The traditional teaching of the Catholic Church is actually that celibacy is the highest way of life. See Session 24, Canon X of the Council of Trent. (That link goes to http://history.hanover.edu/texts/trent/ct24.html, in case the link doesn't work.)
This has been lost in modern times with the dominance first of the notion of the nuclear family, and then of sexual politics, and the Church's responses to both of these things. However... there it is.
Also, semi-tangentially, I found this article when I was looking up a website to cite the above canon (that's http://www.ts.mu.edu/content/51/51.3/51.3.4.pdf). Food for thought.
and anonyreader #2:
If you want to get rid of priestly awe, trying having a kid brother who is a priest. My brother [Redacted] was ordained a couple of years ago, and he is still just as goofy as he was as a kid, and a little too firmly Republican for my taste. But he's still a good priest. This also probably pertains to folks who form close friendships with priests. It's inevitable that one sees one's friends as complete humans, otherwise you are not really their friend.
I think a lot of people avoid friendship with priests because of some of the issues you were talking about. They distance themselves from them out of a reverential awe. While I think it's a good idea to maintain a certain distance from your confessor, or perhaps even your pastor, it would be beneficial for most lay people if they had a decently close friendship with a priest. (If priests only have priest friends, they become an insulated echo chamber, just like any other credential based group.)
I had a small problem with this line from your post. "These are reasons that a layperson-to-priest attitude of empathy at best, wry distance at worst, will serve both parties much better than a surfeit of awe." This may be true, as I said, when dealing with your own confessor, but with priests generally? Doesn't this instrumentalize priests, rather than treat them as full and complete human beings? If the awe of the laity makes it too easy for priests to cover up sins, I think it's a good idea for there to be people who are ready and willing to tell a priest he's wrong.
I value my friends the most who will tell me when I'm being a jerk. I certainly don't hesitate to tell [Redacted] when I think he's wrong, and I decline to call him Father or show him any more respect than I ever have, and I think that will ultimately be to his benefit.
Just some thoughts.