I think the problem is the Badass AI, as someone put it, and that you don't have the same freedom of movement they have. I remember that the original Privateer didn't have an issue with keyboard fighting. The AI sihps were slow anyway. But now they're not, so quick and precise control is a must, something that cannot be achieved with the keyboard.
If someone wanted a "propper remake", as the one they talk about in the thread with the same name, the AI should be downgraded a lot. I'm not for it. I would love the AI to be real badass. You just have to have the same abilities: map the thruster keys, allow disabling the inertial compensator without disabling thrusters too, and you'll be able to maneuver as the AI does (if you have the skills).
After all, why would you expect to be able to whack a Stilletto (or even a Galaxy) in your Tarsus? Get Real! I think difficulty levels should map to reality settings. In the easy mode, it's just as the original privateer, even with keyboard controls you can fight as an ace. In the medium setting, it's somewhere in-between, where fighting 5, 6 talons is a challenge, but possible. And in hardest, if you try your luck against a Stilletto in your Tarsus, you better have a savegame somewhere, since the odds would be 1000:1. Even a Talon vs. Tarsus encounter would be grim for the Tarsus (the Talon is a fighter, after all).
In that model, the autotracker would be an important part of it: in easy, you have the current autotracker. In medium, tracking cones are reduced, and in hardest, the tracking cone is very narrow, only to allow precision aiming at a distance, but the gross aiming is on your part.
I'm not sure if the AI should get autotracking or not. If the AI had autotracking, you would die almost immediately most of the time, unless you "spin and fly like a hummingbird", quoting sbdy, like the AI does to avoid the precisely aimed volleys. That would make dogfighting really dynamic, but big missions almost impossible. A 2 on 1 in those terms is death for the 1.