Idea is good, but I dare to say that realization is not that good
Why ? Because those who could most benefit from this can not use current v. of your SW. People with 512K Ataris. Solution would be to split images in smaller chunks and do writing in multiple steps. Like ~250KB parts.
Even better would be to do it by sending just single track at once, and immediately writing it. Using practically same parameters what XBIOS 9 function uses: sector count (9 or 10 usually), drive # - 0 or 1, side - 0 or 1, track 0-79 (or more). Then it will need only 5 KB for buffering. Of course, can add XBIOS 10 for format too before write sectors to track.
Famous Schrodinger's cat hypothetical experiment says that cat is dead or alive until we open box and see condition of poor animal, which deserved better logic. Cat is always in some certain state - regardless from is observer able or not to see what the state is.