I don't see a reason to scrap it, they just need to be honest that they are applying it correctly and be aware of how accurate the system really is. If we're down to the trying to measure things to mm scale with a system where the inaccuracy is of the same order and is operated by humans to tell the system what they're measuring between, introducing an even bigger error then they're probably being too pedantic with applying the rule, and certainly shouldn't be stating with confidence (which is required) that a foul has been committed.
What this boils down to is establishing a grey area where you decide to give 'benefit of the doubt' one way or another.
The problem here is that lets say we state that there is a grey area of 15cm.
All we're going to do is end up arguing about whether it's accurate to decide if someone was 14.9cm offside and should be given benefit of the doubt or 15.1cm offside and should be ruled against. You're not really creating a grey area so much as moving the point of contention.
Personally, i'm happy enough that we use such a system with the accuracy level it provides, as it's still a considerably more accurate and consistent measurement than a linesman is.
Maybe they should do it by a panel - 5 individual operators all pick the two points the hawkeye system is comparing and go with the majority result of on or off, to 'average out' any potential for it being a pixel or two wrong.
It still amazes me that we've been complaining about linesman not being accurate enough, we've improved it massively and now everyone is absolutely livid to the point of claiming the death of football that a few mm is now not accurate enough to be considered more reliable than a linesman achieving, at best, a judgement to the nearest 30 or so cm.