Popular votes on gay marriage sounds like having the power to vote on the pens your workplace buys, relative to the powers of government. I suspect we're allowed to vote on it so that liberals can shake their heads about the need to constrain the irrational masses, much like Bernays wanted.
On greater matters, like replacing the government with a more bottom-up democracy for a self governing and self managing citizenry... that's just inconceivable.
But I think there's also a trick -- voting doesn't define democracy. There are other decisionmaking procedures which real-world democratic groups use, such as consensus and fiat. Voting has some antagonistic properties, as there are generally winners and losers. It can possibly be used to split the population into "values voters" who wear different jerseys; after all, gay marriage is literally called a wedge issue.
(And of course, some just dispense with general terms like democracy, and use more specific ones like "participatory self-management," which means having the ability to participate in decisionmaking in roughly the proportion you're affected by it.)
Tayssir