Terrible projects should be stop receiving funding from the DAO as soon as they fail to meet their milestones. Since the Hive Thive show this week, I've removed my vote from all proposals except the return proposal.
If we can get downvotes in DAO proposals, I'll use my HP to downvote underperforming proposals.
Weighted voting is also a good idea.
As far as small stakeholders, there's a lot of voter apathy. I'm of the opinion that people don't care much unless you have skin in the game. In fact, you should only be able to get rewards from the rewards pool if you have a certain amount of HP. That way we guarantee that everybody has skin in the game.