The internal market doesn't even display trade history

I could swear it used to. Was it removed?

Let's assume the mean price feed for Hive was telling us Hive was worth 46 cents externally

It doesn't really. Witness feeds are an hourly average. Witnesses don't update their feeds in real time as the price changes every second (or more often) on exchanges. You can't use this to compute a real time price of HIVE or HBD. That information doesn't exist on the chain.

Why are we using a dollar sign?

Dollar signs are used for many different dollars around the world. It doesn't imply USD. Nothing about the internal market involves USD, it is purely trading beween HIVE and HBD. Still, it would be okay to stop using the $ and be more clear with explicit HBD (if a bit less space efficient). Either way seems fine to me.