That's why you don't use circular dragging for a knob, you use vertical/horizontal drags (or a combination of both, JUCE supports those for reference, I forget what it defaults to). I've only seen rotary dragging in a handful of products and it always sucks.
Arrow buttons are pointless when you're trying to dial in a value - which is the whole point of using knobs in audio software. They don't give you adjustable granularity or an easy way to continuously adjust - and if you do give it those functions, you've made a knob without the visual feedback of knob position. Or like you say, put it in the center of a ring of numbers, but again, you've just made a knob!
Arrow buttons are pointless when you're trying to dial in a value - which is the whole point of using knobs in audio software. They don't give you adjustable granularity or an easy way to continuously adjust - and if you do give it those functions, you've made a knob without the visual feedback of knob position. Or like you say, put it in the center of a ring of numbers, but again, you've just made a knob!