I agree that the combo of the rules does seem pretty clear when viewed in steps and not trying to assume what is meant.
As BlackMist posted, you first have to be able to legally declare a charge, and that requires using the LoS rules. If you can charge, then the box-out exception is taken into account, allowing you to ignore blah, blah, blah. Playing this way may not seem "right" for a Flying Monster, but it does keep things fair on both sides since the FM can't charge without LoS and likewise probably can't be targeted because if they can't see (with 360 degree) most likely they can't be seen either.
If someone doesn't like it and wants to play without regard of the LoS restrictions then, as I mentioned earlier, the most fair way would to be sure it's reciprocal. If an FM can see "over" other models when determining who to charge then other models can see over those same obstructions to the FM.
Personally I think that the FM player will quickly realize that the rules, as written, are helping them out. Generally FMs are going to be an arrow magnet. If I have twelve Companies of Wood Elves spread out over a few Formations, and I can see your Winged Nazgul right over the tops of all those heavy armored Morannon Orc and Trolls, I can assure you that you're going to have a helluva headache watching lots and lots of dice cast against that H2K table. I think you'd be much happier being able to hide him behind those grunts until he's close enough to act as you want. So to be honest with you I'd be more inclined to think players trying to KILL the FMs would want to see the LoS restrictions lifted and those using FMs would like to keep them hidden (even if it's pretty stupid to see a Fell Best crawling on its belly behind a horde of Orc).