You make a good point that the RNC position requires streetfighting, which might not support building a presidential image.
Still, sending him overseas makes me worry.
I'll comprimise with you: Steele replace Bolton who's toast. Thus, Steele gets foreign service credentials and will be more visible at home.
The other thing I worry about is that the emboldened Democrats will reject anyone Bush sends, including Steele. If he goes to the EU, this is less likely.
Regards, Ivan