Question about iThemes Security conflicting with JetPack.

Is there any middle ground between disabling XML RPC via iThemes Security and allowing JetPack to function?

Yes, George proposed some alternatives in the thread you linked to:
https://wordpress.org/support/topic/disabling-xml-rpc-may-damage-jetpack?replies=12#post-5366625

iThemes Security actually offers the alternatives you mentioned in its options, so you don’t need to install any other plugin or add any code to your site. The middle ground solution is to check the moderate option in your iThemes Security settings, under Security > Settings, like so:
http://i.wpne.ws/Ykn4

As mentioned in the note below the option, you can either disable XML-RPC completely and break things like Jetpack or the Mobile Apps, or only disable Trackbacks/Pingbacks and allow Jetpack to work properly.

It’s worth noting that most of the most recent DDoS attacks using XML-RPC were made using the Pingback feature, so that middle option seems like a good way to block most attacks today:
http://blog.sucuri.net/2014/03/more-than-162000-wordpress-sites-used-for-distributed-denial-of-service-attack.html

I hope this helps.