From those 2, I prefer the second option. Reminds me of Arkanoid and their power drops. Getting them by constantly moving the paddle and reacting to the ball was a risk reward sort of thing.
Yes except that would be all the time so it shouldn't become a pain. But i agree with that indeed.
Correct me if I'm wrong but in Street Fighter the landing of special moves is only one of the contributors to your meter, right? You also get meter charge for the execution of special moves and for taking damage. The disadvantage may be too much if the player loosing has no way to build their meter up at all or have no defensive techniques they can implement. If I recall correctly, Street Fighter 4 introduced the revenge gauge which was separate from the Super Meter and only filled up when you took damage.
Maybe, i didn't look at everyone. I looked at Alpha i think and i saw no damage reward, but defense reward, and especially attack reward with difference between just attacking and those attacks reaching opponent, so i guess the gauge will go way faster if you just destroy your opponent.