3E Diplomacy is actually a good system at base as long as you apply common sense and make some simple fixes. (I can never understand why people whined and whined about one particular area of the system which is so easily fixed.)
It's better than the whole "I roll persuasion" thing of 5e. It's clear that's it's about changing attitudes not convincing. It doesn't matter how helpful you make someone you're probably not convining them that Bigfoot is coming to their bbq and bringing whisky*. It's fatal flaw was always the fact that you could shift someone several steps in one go. You take that out, and say for example that it both takes increasingly more time (exponentially increasing time) and extra rolls to move someone's attitude further steps along.
And it's neat because it leaves room for interacting with the system without rolling.
Say you have a group of mercenaries you need to get information from. Sure the bard may be charming as hell, but their default attitude to the bard may be unfriendly (pretty boy musician in his fancy clothes and with his fancy talk). The fighter, on the other hand, he looks like he's seen some real action and knows where they're coming from, they might start off friendly with him, and if he then goes and buys them a round of drinks they may become positively helpful. No rolls needed. Of course then he still has to talk to the mercenaries in order to convince them to tell him what he wants to know - but that's something you can role-play out, now you've established the parameters.
*because everyone knows he's cheap.
What you are describing is similar to why I love the 5e system with one significant difference/change of focus. Passive checks.
In the AD&D non-weapon proficiency system, with a few exceptions, when you were proficient in something, it was expected that you could just do it. If you had blacksmithing, then given tools and time, you could make horseshoes. That makes sense.
But for some things, you'd need to make a judgement call as to when somebody could succeed at something more difficult. The DC system addressed this, although it strangely meant that in many games, things that you could have just done before now often required checks, since there wasn't much guidance as to when you could just do it.
3e had the Take 10/20 approach, which also makes sense - if you spend a certain amount of time attempting something you're capable of achieving, then you'll eventually succeed. This was a step in the right direction, although there is a subtle difference between things you can just do, and things that you can succeed at given enough time.
Passive checks to me were the missing link.
Now, as a DM, I have all the tools to know when I need to ask for a die roll, based on the circumstances. The Passive score tells me what PC knows how to do, which can be modified by circumstances with advantage/disadvantage. I also know what they are capable of: 20 + their modifier. Anything more challenging than that is out of reach.
If the circumstances allow them to just spend whatever amount of time they need, and the DC is between those two, then what I most need to determine is how long it will take. Most of the time I can just work that into the narrative, without any die rolls.
Die rolls are needed when something is hard enough that they won't just be able to do it, but it's within their capabilities, and there are some consequences for failure, or perhaps not immediate success. For example, trying to pick a lock while the guards are away on their rounds. The rest of the party is watching out for the guards, while the PC is trying to get the lock open. When rolling for their check, I'm actually trying to determine how long it will take, and I use the difference between the DC and their roll to do that, measured in rounds. If they are trying to find something in a wizard's library, that amount of time might be measured by the minute, 10-minute chunks (AD&D turns), or even hours. It also eliminates multiple rolls unless the circumstances change sufficiently to warrant it.
While some people might have an issue with the fewer die rolls, the reality is that we are advised to keep them to a minimum, but without solid guidance like this approach. Die rolls occur only when they really matter, otherwise the focus remains on the role-playing and narrative, instead of the mechanics. Yet it fully accounts for the character's stats and the choices made when building the PC. You might find that you tweak DCs a little bit, but I find that the published DCs are a little low for my tastes.
The other complaint is about things like the Rogue's Reliable Talent. Personally, I think that's a poor design choice, or they didn't quite grasp the powerful system that Passive checks creates. Either way, my players don't care about it at all, and when needed we're happy to replace it with another ability that they would like in exchange. That's something we would work out together, although it's never been a thing, mostly because we haven't run any PCs of that level.
This approach takes into account that the charming rogue, or charismatic paladin is
always that way. I take those abilities into account when portraying the reactions of NPCs, and also encourage players to play the part.
