Replacement needed for ESP8266
If you are worried about the robustness of ESP modules, I have used ESP in a home automation project and it is running fine continuously for around 5 months and I don't see any reason why it will fail anytime soon. I am not talking about a single ESP module but at least a dozen and all of them are functioning properly.

I used ESP-07 along with ESP-Arduino firmware so that I can program it just like an arduino.

I'd suggest you to revisit the circuit and see if you are doing anything wrong. ESP documentation mentions a max voltage of 3.6 V so I'd suggest you to put atmega8 as well as your sensor on 3.3V and ditch the level shifter altogether. There is nothing wrong in using level shifter but I prefer using same voltage level for all micros and sensors if possible. 

Regarding the power consumption, if you are doing things right, 500 mA at 3.3 V should be more than enough for your micros and sensor. However I'd suggest you to check the power lines using an oscilloscope whether you are getting a clean voltage.

In case you choose to try something else, you can go for Xbees, bluetooth or other RF modules. The major issue with these modules is cost and added effort. The extra effort goes into making the bridge between bluetooth and wifi or Xbee to wifi which also increases the cost.

I have never used xbee-wifi but it seems to do a similar job as ESP modules but at a much higher price and is worth going for only if there is actually something wrong with ESP modules (which I don't think to be the case).