Thanks to everyone who has contributed on this thread. It has been a great read.
The system did perform as intended. It is set up to financially incentivize generating units to stay online during these type of events. A generator who tripped offline not only lost out on a huge pricing profit opportunity but were also responsible for buying back the power they failed to deliver. If a South Texas 1.2-GW unit trips offline while prices are at $9K/MW-hour it is essentially losing $360,000 every minute it is down. Over 30-hours that adds up to $648,000,000!
Most, if not all, companies made weatherization improvements after the 2011 event. Some obviously did better and more than others. Some were just lucky (i.e. able to maintain fuel supplies). However, the open energy market operated in Texas is volatile and that means making a profit is difficult and margins are tight. A "low" probability event doesn't always add up to taking additional action in spite of the high consequences. Especially if your already having a hard time maintaining a profit. That is why a lot have sold off, shut down, and/or filed for bankruptcy. Removing the $9K cap would increase consequences of a trip and make weatherizing more of a priority (i.e. higher consequence = more risk mitigation). Removing the cap would also seemingly cause increased volatility.
Market volatility also means investors are hesitant to dump funding into bringing on new generating units. A breakthrough in batteries would be great but if you really think it could happen in the next ten to fifteen years why would you even think about building a new combined cycle plant? There is no guarantee of short term profits and it could be mothballed before the loan is paid off.
One last thing: connecting our grid to the national grid is almost a non-starter. It would require a massive infrastructure upgrade and even more important a system wide shutdown and black start. The grid would potentially be down for days if not weeks.