The current two-column approach is way better than the old one. But still there is not so much difference between old and new approach.
I like to use Meld (http://meldmerge.org/) to compare files and its approach is really cool. Please see screenshot below:
The arrows are clickable and do what you expect to.
Maybe we should inspire of this piece of software and take a similar approach. Let's say the compare from the screenshot above is an edit conflict. I edited the example screenshot and added some arrows useful for edit confilcts:
These clickable arrow buttons adding my text above or under conflicting part by another user would really help with resolving edit conflicts I think.