The federal arrangement is undermined, not because it cannot work, but because the centre still wants absolute power. The crises you refer to were not due to failures of federalism but firstly because of British imperialism that desired the control, inter alia, of a larger portion of the River Nile. Then later on Obote was nearly impeached because of his activities in Congo; when Obote learnt of the pending vote of no confidence in his government, he used the army (henceforth the military interventions in our political lives) to obliterate the Kingdom of Buganda and the remnants of federalism. Please note that Uganda never voted for a republican constitution although I doubt anyone would re-introduce monarchism. Uganda was made a state by colonial design and a republic by force. That this marriage of convenience between different parts of Uganda causes trepidation, is expected, and cannot be simply wished away for ever-lasting tranquility. Furthermore, in terms of the love of power and control, our presidents have not really differed from the colonialists.
You correctly identified the division of powers under a regional system. The catch is that political power is still in the centre in a regional system of government – it does not matter how many ministries become controlled by the regional governments; what matters is how much political power the regional governments can exercise. This is because, the central government, and in the powers vested in the president of Uganda today, the operations and governance of regional governments can be changed at will or even suspended. For example, budgetary allocations to regional governments can be altered regardless of the wishes of regional governments, and a regional government can be easily blamed of underperforming where it is (deliberately) starved of finance and of other resources, especially if a particular regional government is judged to be unfriendly to the central government; in fact the Minister of Local Government might be more powerful than a regional governor. It will take a president of extreme magnanimous proportions to willingly relinquish some of his/her power to federal states in Uganda.
The other reason federalism has been undermined is because anything Buganda favours is anathema to some people. Federalism would be today Uganda’s system of governance if Buganda hated it. It is really amazing that without critical analyses, many subscribers on the UAH forum dismiss federalism as a Baganda thing! Yet, most are living in countries, which are surviving only because they are federal unions of states.
Finally, while an elected Katikkiro is ideal, what would prevent that Katikkiro to act like Obote did against Buganda and the King of Buganda in 1966? Remember that the Katikkiro would possess executive powers. I think Baganda have legitimate suspicions and fear of an elected Katikkiro, especially justified on account of fraudulent election processes, which could usher in an anti-Buganda and anti-Kabaka character. Although the Katikkiro has ever been elected before; those times had fewer Bafuruki. Today, it is possible that we have a Bafuruki majority. So we need some checks and balances. Thus, yes, we can still elect a Katikkiro BUT there has to be censorship of those who can stand for Katikkiroship by the King of Buganda and the Bataka Lukiiko. I for one would not want a Katikkiro who would use executive powers, because s/he is an elected Katikkiro to dismiss my King. I guess other regions in Uganda would exercise similar censorship.