When I read about gearbox problems I can't help but get a little aggravated. Lobaugh, Max Gray, US Hobbies had O scale drivetrains figured out by 1960. Smooth, quiet operation at single-digit speeds without speed control. Top-quality materials and construction. If you've never seen one you owe it to yourself to check one out, or better still, take it apart. Heck, on the 2-rail forum they are discussing drives built in the 1920s and 30s that are very serviceable and still run great!
The bottom line is that except for Williams and Weaver circa 1990, NONE of the 3-rail manufacturers wanted to tool up for a separate gearbox, split chassis with removable wheels and axles, etc. But that's the "right" way to do it! Everything else, including the vaunted 700E, was compromised either for cost or ease of manufacture. There are a few exceptions: Lionel's JLC (pre-Legacy) Y6b is very well made, and I think the Niagara has a two-piece chassis and true gearbox. Ironically all of MTH's HO-scale locos are made this way. So it CAN be done in die-cast. But our beloved O gauge importers choose not to.
There's nothing inherently wrong with back-drivable gears or an idler gear drivetrain. If it allows additional gear reduction, it's a good thing! It comes down to the quality of the materials and the execution, tolerances, etc. In the case of the H10 photos above, I would do something like the "bread clip mod" to keep those gears centered and fully engaged. Also keep a close eye on lubrication. But if the tolerances aren't right then yes, the drive will eventually eat itself and there's nothing you can really do about it. All the more reason to make the gearbox or intermediate gear a separate and replaceable part.
The small front-leaning motor in the boiler is its own issue, independent from the gearbox. I guess this configuration was supposed to make it easier to fit electronics in the loco (which is a bad idea to begin with!) A larger motor will always deliver more torque, and on a steam loco the largest available space is in the firebox. Lionel corrected K-Line's mistake when they reissued the Lima A1 Berk. IMO they should have redone the Pennsy K4 and Mikados in a similar fashion. But instead of asking the hard questions people keep buying them, so... 
That's exactly why threads like this are valuable!
