They did lose their arm, but can still be a skilled warrior/rogue/mage. And mechanical/magical prosthetics of some description aren't out of the realms of possibility, especially since Quizzy has possibly the most skilled magical craftswoman in southern Thedas (Dagna). There's even an ending slide in Trespasser (if you become a Red Jenny with Sera) where the Inquisitor replaces their arm with a freaking crossbow. Which needs to happen.
If nothing else, it justifies them being low level again. But you're right, maybe being a major supporting character makes more sense, albeit I fear some dialog railroading like what happened with Hawke, who hates blood magic no matter how you played them in Inquisition. I doubt we've seen the last of the Inquisitor regardless, their story is too tied to Solas's to just end now.