The thing with animal agriculture is that it's efficient in terms of capitalism. We are really good at growing corn and cutting hay with virtually no human labor, and then we can very cruelly stick all the animals in one giant torture lot to feed them. The perishable product comes out year round, so you can invest in an efficient and constant supply chain without a complex warehousing situation, and corn/hay/silage/whatever is easy to store.

I don't see any way to a sustainable, ecologically sound, less cruel food system within capitalism. It's going to involve a lot more human labor. Even if we want to eat mostly grass (all grains are grass) like the cows do, and, as mentioned in the OP, like our peasant ancestors did, which wasn't a particularly nutritious way of life, we still have to deal with the fundamentally unsustainable way we grow grains today: Spraying pesticides (including herbicides and insecticides) to literally kill everything but the special pesticide-resistant corn, and dumping petrochemicals that are nutritious to the corn itself but devastates the topsoil, and so on. Our farmlands today are functionally productive deserts.

In the US, we are functionally incapable of growing anything labor-intensive without migrant labor. Even where I live, in Vermont, with the most hippie dippy organic farms per capita going on, all our beloved orchards that aren't pick-your-own rely on seasonal Jamaican migrants, whose special visa status also includes artificially set wages by the federal government, otherwise it just wouldn't work. All our economically sustainable dairy operations rely on illegal migrant labor, because there is no dairy visa since it's not seasonal. Everyone I know who wants to farm has a job doing some sort of farm regulation thing instead, like organic certification, and they farm on the side, often barely breaking even -- all this while hunger, especially child hunger, is rapidly increasing in our area.

Basically, the entire thing is fucked.