You can still fix this bag without much taking apart. Take off the handles, and either open up the top seam or cut it right at the stitching and it will make the bag a tiny bit shallower.
Insert a piece of Pellon 65 Stabilizer or TimTex or whatever is the stiffness you like. Restitch the top seam. Position the handles with only about a 9" gap between them. Velcro needs only to be stitched on the edges. You could use 2 pieces of about 3" and it would hold it closed just fine.
Hope that all of our suggestions will help....it is a lovely bag.