There is also a book called Challenge which brings forth several possible reconciliations.
Regarding the main question, hopefully the OO will heed the criticism as did the Chassidic movement and become a legitimate stream. For example, by clarifying that there are certain acts which are prohibited but someone who has a yetzer hara is no different than someone who has some other yetzer hara (and IMHO a yetzer hara to defraud people is worse).
As for your contention that “Many MO youth are leaving Yiddishkeit in droves”, many are staying, many are moving to the right and many secular youth are coming back to some form of MO. IMHO, OO shuls are necessary as halfway houses. In fact, Rabbi Avi Weiss once commented that many people who start out in HIR become so frum that they will no longer daven there – and did not sound unhappy about it.