I'm not really sure where the "line" is, but I see democracy as more of a tool than a virtue. It's a very useful tool, of course, but the idea that every government would be better if it only were "more democratic" is idealism. It is one way for the populace to speak for themselves, and keep the power structures that govern them and their communities in check, but I don't think it is the only way.

There are some issues that need to be decided by officials/bureaucrats, some that need to be decided by the membership of the ruling party, and some that can and should be left directly to direct democracy. I don't know where to draw the lines for those, though.