I'm not sure what people hope to accomplish, by "...eliminating person to person transfers between individuals without a state license (CPL/CCW, FOID, etc)." and similar policies. It would cut down on the number of person-to-person transfers, but so what? Person-to-person transfers are not a problem in this country -- they don't contribute to anything bad. Many mass shooters actually buy their guns from licensed dealers; many of them commit their attack as their first and last crime, so they have no background to check. Stolen guns are a significant problem, particularly handguns; but stolen guns obviously have no record of their transfer to the criminal.
Regarding NICS, it is supposed to instant -- National Instant Check System -- and it is generally quite fast. The issue is not with an agency ignoring the request but rather with agencies not forwarding the data they are supposed to forward. If it's not in the database when the check is run, the check comes back clean -- most NICS checks complete in a few minutes.
If for some reason a NICS check does not complete in two or three days or something like that, yes, it defaults to open and the person gets their gun. That is how it should be. There must never be a possibility for the government to prevent the trade in arms, either for particular people or for the whole country, simply by delaying things without explanation. Process delays are one of many tools governments abuse. If the data is not in the database, another 2 days is probably not going to get it there. Something has to be done about the agencies that don't forward their data, yes; but opening up an avenue for sideways stuff on the part of the government is not the solution.
In the United States, it is illegal to transfer a firearm to a felon (and probably to all other categories of person who would be denied by NICS) -- this is another reason, one I didn't mention, that most sales brokered by GunBroker go through a licensed dealer. A licensed dealer has access to NICS. A regular person doesn't. If they do a private party transfer and, lo and behold, the person they transfer to is a felon, they are in big trouble. They would rather not be in trouble so they delegate to the dealer to handle the transfer.
Dealers maintain none-paper records, too -- as do manufacturers. They have DRoS systems which are electronic. This makes it easy for them to provide data to the ATF when a suitable warrant is presented. What prevents the data from being a resource for government fishing expeditions? It's two things:
* The ATF is formally forbidden from centralizing the data in a big data warehouse -- it is technically against the law to maintain a federal gun registry.
* It is legal to transfer guns, albeit only in special circumstances, outside the system.
These two things together prevent the available information being used for a fishing expedition. Firstly, the government is not allowed to assemble the data; and secondly, the available data is imperfect -- it is not proof that a particular person owns a particular gun or even any guns.
The way this data works, it's not a big problem for combatting the illegal traffic in arms. A large part of that is identifying where, exactly, the arms exited the formal arms business and entered the black market. The data is perfectly suitable for that.
The data can't be used to show that this or that person definitely has this or that gun; and it can't be used to show which people have which guns, or how many people have more than ten, or anything like that. That is a good thing. Those are guns held by private citizens; they are private people, it's their private business.
Gun registries are not of much use for solving crimes related to guns. Criminals don't use leave behind guns that can be traced to them; and if a criminal is apprehended with a gun that may have been used in a crime, the gun has to be tied to the crime through physical evidence -- powder residue and stuff like that. It's not like there's some serial number at the scene of the crime that can be used to find the gun somehow!