P-40 got a double whammy.
They crammed too much stuff into it in the D & E models and they didn't have enough Merlin engines to keep making the F & L versions into 1943.
Or rather Allison spent too much time screwing around with the two stage engine and not enough time making a better single stage supercharger.
A lightened P-40 with a Merlin 24 engine (18lbs of boost) might have been very interesting

Not a P-51 by any stretch but having several thousand ft of altitude over a 'normal' P-40N might have been interesting.
The Us should have decided wither they wanted a P-40 or B-40 (one 1000lb under each wing and 500lb under the fuselage) and designed the wing/landing gear accordingly.
An 8300-8700lb fighter clean (no drop tank) is going to need an hell of engine to compete with 7100-7500lb fighters.
Be that as it may, the Kittyhawk III-IV series proved to be quite excellent fighters
and interdictors in the MTO during this period. And while not as glamorous as the duties served in the ETO, these were still sterling records which manifestly contributed to victory in the War.
Yes, their altitude performance suffered, though in these theatres the effect of this mattered far less. Instead, you had an aircraft with good speed at low altitude (noting that if one compares a P-40N-5 series from 1943 to a Bf-109G-6 from the same period, the P-40 comes out with a slight advantage in 'on-the-deck' speed, and this is neglecting any filters which would accentuate this performance difference...), and a generally-superior combat radius compared to its in-theatre contemporaries.
Combine this with the other characteristics which made the type and excellent interdictor: Maneuverable and responsive controls, decent armament, rugged and well-protected airframe, sizable bombload (especially for the later P-40N / Kittyhawk IV types, which were cleared for a 2,500-lb ordnance load) and it becomes no surprise why the P-40 series was well-regarded by the USAAF and RAF alike in this region, among many other Allied nations abroad in other theatres.
The type was uniquely well-suited to the kind of isolated pursuit, escort and interdiction duties that were required in the desolate sands of North Africa, or the rugged hills of Italy. It was superb at the kind of low-altitude dogfights and logistical attrition which was necessary to bleed the Axis of their supply lifelines into these theatres.
So, in truth, I am not sure I agree that the US needed to "pick a horse" in this case. Having the type as a flexible and adaptable airframe was what
allowed it to remain relevant until the War's conclusion. There were many improvements to the type I would've loved to see, though by the time of the 1944 Fighter Conference you see the general perception among USAAF staff as "Why fix what isn't broken, especially when we have other types to fulfill the more 'first-rate' duties?"
Now, of course, I personally still would love to see the fruition of Don Berlin's fantasies of sticking a two-stager Merlin in a P-40 airframe in 1940...but that wasn't feasible at the time considering the military realities of the RAF, and the political realities of a neutral US.