If you think the JPAC is expensive and doesn't do enough video processing for the money, I kinda wonder what you think you're going to do with this design... Video scalers aren't exactly the simplest things. Decent performance USB video is also not the cheapest thing in the world, but at least "standard res" is low enough that you can (probably) do it with only high-speed USB 2.0 and don't have to go to super-speed USB 3.
IIRC, Andy sells a little audio/speaker amp that pairs with the JPAC nicely. A lot of later cabinets had non-standard stereo or line-level audio with amps built into the cabinet, so I think that's a good compromise.
As to the video amp, yeah, it's not the greatest thing in the world. Again, cost is a factor, especially in the relatively limited volume these things are made owing to the declining popularity of standard res CRT arcade monitors (most VGA-capable ones don't need an amp at all - they just plug straight into a PC) and general declining popularity of even JAMMA. The Minimaid IO has a super nice video amp, but the amplifier on that thing would be cost prohibitive on something like a JPAC (a Minimaid IO will run you about $300).
Also, they're not actually ISA edge connectors. The pad pitch is 0.156", whereas ISA was 0.1". If you're doing a custom PCB, this isn't a problem of course.