It seems to me that if the taxable amounts of successive annual IRA distributions are plugged into the formula in Example 2 of Pub. 559, this is the same as the FIFO method described by Kitces.
With this method my estate tax deduction would have been exhausted in 2014. I’m not sure this would have been a good thing; it depends on what my marginal tax rates were (and will be) in various years.
However, Pub. 559 says “If the amount you collected for the accounts receivable was more than $12,000, you would still claim $2,772 as an estate tax deduction because only the $12,000 actually reported on the estate tax return can be used in the above computation.” This indicates to me that the Pub. 559 formula is not meant to take into account any growth in the inherited IRA after death of the decedent.