John,
When using the rubber-band method we can assume in most cases you will be inserting in between two waypoints based on where you touch and drag from. Example, touch either before or after the waypoint to want to insert before or after and drag the route line to the desire location, it will insert in between those points. If you are looking to backtrack to a waypoint, just touch the magenta line on the far side of waypoint and rubber band it back to the point of desire. It does two things, it inserts a new waypoint after the next waypoint, and secondly it lets you position that waypoint geographically infront of the next waypoint. Effective flying you to the far waypoint, then backtracking to the newly inserted waypoint.
You can also go to the Flight Plan and touch the "OPT" to the left side of the list and get a full list of insert options and also the ability to move up and down in the list. This might help you out some.
We'll have to look into this a little as this is the first time its come up. We want to keep the menus and pop ups to a minimum if possible. Apps like ForeFlight and others become very cumbersome when having to tell it to much, when just touching between two desired points should tell it you want to insert a waypoint there. I hope this helps and is not more confusing.
I like your questions and thoughts so I'll definately push the idea around the office and monitor the forum here. Thanks again.