You could use a Diffie-Hellman exchange to get a shared secret so things are "obscured by default" but not trusted, then let higher layers deal with trust validation. For example, the TLS certificate handshake could just be a matter of constructing a blob containing the two endpoints' DH public keys and signing it to prove that a man-in-the-middle hasn't intercepted the channel. All the actual encryption would be handled by the IP stack and offloaded to hardware, while the application-layer TLS bits would be used once at startup (and maybe subsequently if the lower layer re-keys) then get out of the way.
Key and cipher negotiation could easily be shoehorned into the three-way-handshake already used to establish connections. AES with a CTR block mode would be the obvious cipher choice since each packet would be handled separately. With TCP you could even just use the sequence number as the counter, although this would be harder at the IP layer.
But yeah, none of this would have been available at the time. Still, given today's technology it would not be difficult to future-proof, especially if the trust machinery is left to the application.
Start with AES-CTR (which wouldn't have been an option in 1979; counter mode hadn't been invented): you can't use TCP sequence numbers as counters; among other things, multiple segments can be sent with the same sequence number, and while the byte described at the stream offset of those sequence number (usually, but not always) agrees with every other packet, no other guarantee exists about the nature of those segments. Reuse of a counter in CTR mode is a devastating flaw.
Running DH over an unsecured connection with no previous trust anchor is also a recipe for disaster; attackers don't even need a fully-functioning man-in-the-middle to break it; they just need to be able to inject two segments, one in each direction, to fixate the derived key.
Everything else you propose to layer on top of this DH + AES-CTR connection is handwaving; if you have to run "application-layer" TLS, what's the value of hardcoding (broken) crypto into the TCP layer?
Sorry for the rabid response to a well-intentioned comment, but wow I couldn't disagree with you more strongly.
Key and cipher negotiation could easily be shoehorned into the three-way-handshake already used to establish connections. AES with a CTR block mode would be the obvious cipher choice since each packet would be handled separately. With TCP you could even just use the sequence number as the counter, although this would be harder at the IP layer.
But yeah, none of this would have been available at the time. Still, given today's technology it would not be difficult to future-proof, especially if the trust machinery is left to the application.