But I'm afraid to say I disagree with your idea anyway. What your
proposal boils down to in essence is to use an Oyster as if it were a
cashless card system, and so use the PAYG balance to buy a ticket.
Instead I'd say that if you want a Day Travelcard you can just as well
buy it with cash or a debit/credit card.

The preferable situation would be for all lines in London to accept
Oyster PAYG, and then all passengers could benefit from daily price
capping (which is in a way akin to a Day Travelcard except you don't
have to plan ahead before you start travelling that day).

Of course there would still be the tricky issue of which route the
Oyster system presumed you had taken, regardless of what actual route
you did in fact take.

When Oyster was first launched, you could use the balance on the card
to make payments for any product at LUL ticket machines. I seem to
remember that this capability was withdrawn when Prepay was officially
launched. I suspect this was due to the e-money and "TfL as bank"
issues.