"The former. There was no mechanism to allow someone to leave the Euro"

Hmm...this is once again conflating defaulting with leaving the Euro. From the article you cited:

"Actually, a second [default], as Greece technically defaulted on its debts when it renegotiated a 50% write-off of its debts with its creditors earlier this year."

So Greece has defaulted, but they haven't left the Euro.

"The drive for greater fiscal union, a common regulatory authority, etc, that we see now is an attempt to fix such issues - ie having so much control that these defaults never happen."

I would say: "...that this sort of debt-binge on someone else's dime can't happen."

If you have a common currency, you also need these other mechanisms. It wasn't politically feasible to get this at the time, so the Euro was used as a "forcing function". Once you had the Euro, there really wasn't a way around more common financial control.