Do you recall the AFC divisional round at Pittsburgh? Elway was faced with a 3rd and 5 in his territory. You're saying he should've run the ball and punted it? Well, we all know what he did. He told Shannon Sharpe to just get open. He converted it and the rest is history.
Fox exhibited his fear of failure by running it into the line on 3rd and 7. Percentages are nice, but if you go by percentages, the broncos punt to the steelers and they tie or win, in all likelihood. What do you lose if you don't convert? 2 yards and you STILL get to punt it deep, albeit with 30 more seconds on the clock.
I disagree with the OP take. You throw it--even a wr screen to DT or something where he can stay in bounds if he's short. Running it with hillman was submission.