I agree with your earlier point that he wasn't as good in 80 as 81, but I still think both he & Ovett could have run 3:30 in 1980. Coe said in his biography that it was a WR attempt, but when the pace slowed down dramatically after 800, and the rest of the pack were with him at the bell, he decided to just go for the win, rather than take a risk and go all out for the record. He was still probably tired (physically and mentally) from Moscow, and he was up against athletes who were fresh from not being at the Olympics. For the likes of Scott and Walker, this was the most important race of the year.
Notice that Coe does a few mini surges on the last lap, then keeps throttling back until the straight. I don't think there was any chance he was going to get beaten, and I don't think he was close to being fully extended either, but you're entitled to your opinion. He was perhaps guilty of lacking the confidence of really pushing it from the front in search of a record (as I feel he was also in the 81 Brussels Mile), but that's more born out of just not running the distance enough than any lacking physically. Certainly anyone who can open up a gap like that in the last 100 has quite a bit of unused energy at the end.
If interested I broke his run down using your old(or is it revisited?) formula:-
Coe’s 3:32.19 in 1980
54.5(26.4,28.1), 58.2, 58.8, 40.6 (13.0 for the last 100m).
200 x (200 /26.4)^3 = 86957.73158
200 x (200/28.1) ^3 = 72110.91777
400 x (400/58.2) ^3 = 129858.6882
400 x (400/58.8) ^3 = 125923.8482
200 x (200/27.6) ^3 = 76101.41579
100 x (100/13.0) ^3 = 45516.61356
Total = 536469.2151
536469.2151 / 1500(m) = 357.6461434
Then find the cube root to get speed per second = 7.098248218
Then take 1500m and divide by speed = 3:31.32
Take off 0.25 for no drafting from 1000 to the bell and you get 3:31.07.
I still think he had a bit left that night, so a 3:30 .something isn't unrealistic. I would also suggest that he had been at a season's peak 2 weeks earlier in Moscow. Soon after Zurich he went to check out a back problem and discovered he had sciatica and had been running with a pelvic displacement for most of the season. He ended his season as a result.