This is a pretty easy repair. Sweat out the dropout pieces. Sandblast. Braze in a new one. I've done it, in the back of a bike shop, which means it can't be too hard. Should be no problem for a framebuilder.

I'm kinda thinking the Simplex dropouts are close enough to work. Thin tubing is a concern, but it's still doable I think. Give the torch holder a heads up.

It's IME the most common failure mode of a traditional steel frame. There aren't that many things that go wrong with steel frames, but this is one of them. It's always on the drive side. Caused by fatigue from the axle flexing on the drive side of a freewheel hub. Usually the dropout snaps, but I've seen chainstays crack near there too.