For propellant to keep burning you need to put a certain amount of energy back into the propellant to vaporize the components, and then burn them. Close to the earths surface the burning material is kept closer to the unburnt material, so the energy transfer is faster and more easily completed. Higher, the burnt hot material spreads out faster and energy isnt transfered as quickly or easily. The reason they burn slower is the exact same reason burnrate of propellant increases with an increase in KN (pressure)
As to overpressurizing vs ballistic recovery. I would MUCH rather take overpressurization. Kermie, imagine if that peice of Al had traveled towards the crowd. It would have been flat (no rail to rap around) and started at high speed but VERY quickly it would have slowed down. Try to throw a dinner plate (not like a frisbee) and see how far it will go, it will stop dead.
When something overpressurizes you can see where the rocket is, and probably get behind something you know which direction stuff is moving (which 95% of the time is straight up and down because the case will fail at the nozzle or bulkhead) When something comes in ballistic often no one knows where it is, and someetimes not even that something is coming in.