I was thinking to setup a witness node as well and try to contribute to the steem blockchain, however I agree with multiple points you made in your post, there are a certain degree of bias or flaw (especially inactive witness). I would suggest or even propose something like a league, where given a time frame, witnesses are "revoted" for the next period rather than staying on top forever. Of course this will also goes into a strong debate on how DPoS should work.