Is there no other mechanic to replace true damage?

Yes, leaving it the way it has always been : a rare stat provided to niche picks.

Better AD/AP ratios or better penetration but then squishies would die even faster.

True damage should be removed except from Ignite and some other small things. Vayne shouldn't have ever had true damage and instead did %physical damage. It just doesnt make sense. The game would be so much easier to balance if True Damage didn't exist everywhere