No, sorry, I meant replace affected portion of DPC .would you still recommend putting new wood back?
I'm with you on this point. You could build another sleeper wall just inside the original, capped with dpc and wall plate. This would allow a bit more circulation around the ends of the joists. (you'd cut them about 3/4" shy of the boundary wall). But this is perhaps a minor benefit compared to the simplicity of using joist hangers, (as you suggest).
It used to be quite common to bed the ends of timbers in the wall like this. The thing I don't like about it is that, it exposes the end grain of the joists to the damp in the wall. Also, it's a b*gger to replace an individual joist later when it fails.