The HR derby is one of my favorite events of the year and it was pretty wild to watch in person last night. There were often two home run balls in the air at the same time. The crowd really gets into it when a player smacks a few in a row like that which is exactly the situation that makes it difficult to watch on TV. I'll admit that it was even tricky to watch in person because your eyes want to be looking in two or even three places at once.
I get why they do the current format -- it is optimized for getting as many home runs as possible -- and it's clearly working to accomplish that goal since there were something like 340 home runs hit last night.
This event probably draws more non-baseball fans than any other event of the year, so my inkling is that it doesn't necessarily have to be appealing to baseball fans and it's ok to make it a bit gimmicky. The event has certainly benefitted from the format changes over the years -- the "outs" format was clearly inferior to the current timed version, but now the timed version has run its course and it's time to make more changes.
Any change to the format will test something different -- right now it's largely an endurance test which is fine but BruisedCrew's idea to limit the number of swings in a timed round is appealing. That could potentially introduce some other incentives like giving a bonus swing for an opposite-field home run or hitting one beyond a certain distance. The main thing that is lost in the current format is probably the 475+ ft home runs, since there's no incentive to hit more than two 440+ ft home runs under the current rules.
Another idea that I have is to make the bonus round consist entirely of incentive-based swings (or pitches). One bonus swing for every 440 ft home run, two for every 480 ft home run. And maybe some other incentives like the opposite-field home runs or bonus swings for hitting home runs on more than 3 consecutive pitches. The possibilities are endless which is part of what makes it fun!!
By the way, the all-star game itself needs a format change as well. I think it will come eventually and I don't know exactly what it should be ... maybe not as crazy as having them play banana ball but something along those lines would be kind of fun.