If there's no extra exit lane, the right choice is to slow down traffic on the highway.

What will happen if there's some oil spill or brake failure at the point you think you should break hard?

The exit ramp is not sufficiently short as to be unable to stop safely, even with my old 2001 Toyota Corolla. It is however sufficiently short that you cannot stop without recording a 'hard brake' on the Progressive Snapshot device.

Obviously the calculus changes at rush hour when the exit ramp (and highway) begin to back up. And in those cases, yes, of course the correct answer is to slow down before the ramp, even if it means impeding traffic. (Or take the next exit.)

Just for fun, there's also a very short entrance ramp onto a 65mph highway in this city, which requires you to accelerate uphill from a stop sign with a very limited runway (~200 ft.) This entrance has been responsible for far more accidents and crashes than the exit I initially described.