Folks, thanks for the answers!
Roger, I'm putting it back in because I think my car needs it in the Texas heat (the past few weeks the temp here has been 100F+). In addition, my car [allegedly] has AC. (still need to reinstall it once I'm done with all this other stuff). In order to switch to the air-cooler setup from later cars, I would need a radiator from a 280SE/coupe before the changeover to the low-grille coupe design (I think the radiators are different). In any case, I'm also adding a heater bypass to increase the flow from the back of the head during summer months.
As far as the heat exchanger being "prone to failure", I can't really say much except that everyone I've talked to (those who've had the same issue) has reported coolant leaks on the outside (not an internal leak between the oil and water passageways). Also, a couple folks have reported a repeat failure, and at least in one of those cases the repair was done without re-soldering the entire seam (don't know details about the other). I decided to have it completely de-soldered before re-soldering the seam along the entire perimeter. If a re-soldered radiator can hold, then so should this. (knock on wood!)
Regarding the design change, I really don't know for sure why MB changed over to the air-cooler setup. However, the heat exchanger (in M127 and M129) has a dual function of (1) heating up the oil quickly, and (2) keeping it cool after it has heated up. In the M130 cars, my guess is that heating up the oil quickly was much less of an issue than keeping it cool. Therefore, they went with just an oil air-cooler instead of an exchanger. The location was probably changed because an air-cooler is much more effective where there is a good flow of air with a greater surface area (hence, right beside the radiator).