The weakness to Stealth Rock is super annoying for both sets, though I think it particularly hurts the ability of the Defensive set to outperform other Defensive pivots. The offensive set mainly faces competition from other pokemon weak to SR so while the weakness is annoying and compounded further by LO recoil, it doesn't make it any worse off than Darmanitan or Victini.
I agree that Crunch is a great option for Arcanine and is less risky to use in case they try to sneak a Flygon in on a predicted Wild Charge. Wild Charge is decreasing in relevancy as Milotic has been overshadowed by the metagame, but it is not altogether useless. It hits Slowbro for slightly more damage and also can kill the (very) rare Azumarill.
I disagree however, with the idea that the metagame is too offensive for the defensive set, however. Whenever I put an Offensive Arcanine on my team I find myself switching it at some point to the Defensive set because I get greedy and want a solid but powerful pivot. The element of surprise is a huge boon to the set. It can play offensively for a little while, revenge killing and tricking the opponent into thinking you slapped a band on Arcanine, and then bam, you Toxic or Flare Blitz something that can't deal with the respective move.
I'd agree in saying that I find myself hardpressed to say Arcanine has the sweeping capacity of a Darmanitan, but I think it is a better early game wallbreaker. An undervalued strategy is Dual-Physical Fire types, as Arcanine is capable of breaking a lot of counters to typical fire types to the point where a late game clean up is more than viable.