"Probably the fundamental problem here was a sub-optimal schema, but sometimes you're just working with what you've got. Plus a commenter on Reddit pointed out that if we used pure SQL functions instead of PL/pgSQL, we'd also have seen better performance then."

So, would the better advice not have been to use simpler SQL instead of complex recursive statements, instead of taking a drastic approach to abandon ship (move logic to a completely new layer)?

Also, if you're doing string concats manually for your Json, this might cause some overhead for larger objects. ??