Uzbl

totally agree.

I like this but I'd like input on how to implement it.

The reason this is so easy to do with modes is that they don't contain any spaces or other special characters so I can easily iterate through a space-split set of arguments and 'toggle the mode'. This changes when I'm toggling through variables that have spaces in them.

So do we:
# @set_toggle <name> <key> = <value>
set set_toggle = request SET_TOGGLE
# @toggle <name>
set toggle = event TRIGGER_TOGGLE
# @clear_toggle <name>
set clear_toggle = event CLEAR_TOGGLE

Then:
@set_toggle mode_toggle mode = insert
@set_toggle mode_toggle mode = command
@set_toggle mode_toggle mode = visual

Using the brace_expansion plugin this isn't so cumbersome:
@expand @set_toggle mode_toggle mode = {insert,command,visual}

Then to trigger it:
@bind <Ctrl>i = @toggle mode_toggle

What do you think?

The problem with this approach is when a user:
@set_toggle my_toggle mode = insert
@set_toggle my_toggle set_status = 0
@set_toggle my_toggle mode = command

What happens then?

well, this ticket is intended for uzbl-core.
The original "toggle_insert_mode" example doesn't apply anymore but we still have this in uzbl core:
- toggle_zoom_type
- toggle_status

which should be replaced by a toggle command so we can do 'toggle zoom_type'

Now, for your EM implementation:
Are you suggesting to write a plugin so that users can define a list of possible values, which can then be iterated? [no need to define them all separately, right?]
why not use a python dictionary for that?
something like:
set values = request VALUES_DEFINE
set next = request VALUES_NEXT
set prev = request VALUES_PREV
@values mode = {'insert','command','visual'} # your plugin will keep a data structure with for each key (here 'mode'), a list of options
@prev mode # your plugin picks the previous thing in the dictionary.