That is pretty much what I said also, if you have some way to apply 400 Horse Power to the ground, then by all means use the TH-400 (3L80), but if you are going to sling mud (no traction), or you don't produce 400 Horse Power, (99% will not) a TH-350 (3L60) or TH-700R-4 (4L60) will be better suited to the task.
I'm currently testing an AMC 360 CID engine, and when it comes off of the dyno, it's going in front of a 727 TF or a TH-400 (3L80), simply because I have cases for both that match the bell housing bolt pattern.
The ground up rock crawler we are now collecting parts for will have a TH-700R-4 (4L60) because of the optional lower first gear, overdrive, lock-up converter and the TH-700R-4 is only slightly less strong than the TH-400 if the center bearing is replaced with the Corvette/HD/Police ('87 & Up) version.
The first gear shift down you were talking about at full throttle will happen with a TH-400 also, so that argument is moot.
If you don't want the shift down to happen, get a $30.00 Trans-Go shift kit,(Trans-Go! No Yo-Yo!) and install the plug in the valve body to stop the down shift. (They have pictures)
If the problems you spoke of were actual, they wouldn't run TH-700R-4's in (drag) rails.
According to GM's usage guidelines, the 700R-4 is stronger than the TH-400 in all but one category, (shock loading). That's probably why they put them in the Corvettes, Trans Am's, and every other high performance vehicle except the Buick GNX (TH-200-4R) and the SS 454 pick-ups (4L80E, the overdrive electronic shift TH-400), and the first of the SS 454 pickups (Pre '91) had TH-700R-4. 1995 and up 1/2 ton GM 4X4 and some 3/4 ton GM 4X4 trucks have TH-700R-4 (4L60E, electronic shift TH-400).
In case you haven't figured it out, our transmission guy is in the chair next to me. You can do that when you own the shop. (It's good to be King!)
We tow race car trailers to the track every weekend with a 700R-4 at a high rate of speed, race one or more TH-700R-4's every weekend, and are about to off-road one behind a chevy 502 CID that cranks 780 HP on pump gas.
BTW-- A TH-700R-4 has lived in a half a dozen blown big block race cars cranking over 900 HP all season- AGAIN... How do you explain that?
The only draw back I can see in the off road market is the cost of the T-case adaptor and output shaft. (Between $200 and $300)
Note to the extreme user...That much larger bearing I spoke of will fit right in a TH-350 case with no other mods, and increase the trans strength about 15%.
(Low Reverse Sprag/ Center Support Assembly, '87 and newer)
Happy trails folks, Aaron.