I think McBride makes a very good point in wanting to limit the "film-within-a-film" footage: Welles intended the scenes showing John Dale and the girl to be a parody of the kind of youth-oriented/"Easy Rider" excesses of the time. By attempting to make this kind of movie and for the footage to appear so meaningless, Jake Hannaford demonstrates that he has lost control of his craft. This is an important aspect of the story. That's not to say that the John Dale/Girl footage couldn't provide some striking juxtaposition, but McBride's argument is that if you include all of the "film-within-a-film" footage (or make it 50% of the overall running time) Welles' film itself becomes the thing he was trying to parody. The entire story arc as detailed in the script(s) would be jeopardized by having to sit through 40 or 45 minutes worth of interpolated artsy shots showing two characters silently following each other around.
Even the footage edited by Welles would need to be reevaluated since Welles' method was to cut individual scenes together using all available material, then start trimming away shots (sometimes drastically) in order for the individual scenes to play well in the movie as a whole. Welles never got to edit more than a handful of individual scenes, so we don't know how intact he would have left these scenes. Given the completely fragmented nature of TOSOTW footage, the best bet would be to follow the original script(s) in determining what material goes in and what story ideas need to be stressed. Putting everything shot into the final cut would almost certainly result in disaster.

