They also have direct democracy, where any citizen can trigger a referendum if they gather enough signatures in a certain amount of time.

This sounds like a recipe for disaster, yet Switzerland has one of the most stable governments and most prosperous economies in the world. It works because they are stubbornly conservative (little-C conservative, in the sense "if it ain't broke, don't fix it") and slow to change. In general, it works for them, even if it has some anachronisms. Women only got suffrage in 1971, for example, and there's no guarantee of religious freedom (e.g. http://en.wikipedia.org/wiki/Minaret_controversy_in_Switzerl...)

tl;dr - there's more than one way to run a country, and it's better to err on the side of not changing what works. But if you take this approach, you have to be mindful that just because you suppressed certain peoples' rights in the past doesn't mean you should in the future.