I also think Jenny Nicholson had that exact same idea on her TROS review.
I do think it is one of the better alternatives, because you could arguably keep a lot of what is already there. Palpatine could even tell Kylo, “She is not who you think she is” and he reveals this truth to Kylo. Rey still battles with a dark past, but instead of it being about bloodline, it is about something bad she did that she had blocked out of her memory. It also ties in well with her being possibly afraid of repeating the same thing and hurting her new family, she makes a tree fall on BB-8, she almost kills Chewie, and she uses the Force to push Finn away on the Death Star. And finally, she almost kills Kylo. While Kylo isn’t a part of her family, she obviously has complicated feelings for him. That last act was enough to make her decide she was too dangerous and thought exiling herself would be better for everyone else. Plus, I could see this shocking reveal having a more positive reaction from the audience than “You’re a Palpatine.” Most importantly, it keeps the focus on who Rey is, rather than other people around her did in the past.
One downside is that I don’t see a way to tie that into Ochi, the dagger, and his ship without it being really convoluted. The imagery of young Rey blowing up the ship with Force lightning is really interesting, but for one, you would have to make it a different ship than Ochi’s, because I think the similarity would confuse people and assume there is a connection. The dagger could just be an object imbued with the dark side, and can trigger violent visions or memories.
Another think I kind of don’t like about it is that it paints Rey as being powerful in the Force even at a young age, and I prefer the idea that Rey may have shown no special abilities until she started this journey in The Force Awakens. Maybe when she killed her parents was one of the first times her connection with the Force really were displayed, and Rey was so shocked at what she had done, she not only blocked out the memory but also rejected that connection to the Force she had. It could be part of the reason she reacted so viscerally to the Force calling to her in Maz’s castle.