I can imagine many more problems that would cause. Apparently I don't have as high an opinion of the average person as you. It would certainly lead to a different incentive structure and outcomes, but not necessarily better ones. The book "Democracy for Realists" covers more details about how people vote. Spoiler; they tend not to be very rational, objective, realistic, or nuanced.

Imagine a restaurant whose menu and prices were voted on by the people at large. What would happen? The menu would look deranged and prices would be too darn low for the restaurant to function in an economically viable manner. The whole restaurant operation would collapse! Who said democracy is a good way to bring about stability and prosperity to an organization/operation in the long run?

That would require people to constantly educate themselves to deliver a proper vote, which is unfeasible (because people have to work and live, and large parts of any country are too ignorant/uneducated/outright dumb).

Representative democracy was invented to solve that problem by having the representatives and their staff do that education, but they took the easy way out and listened to those with the biggest campaign contribution coffers.

I can imagine all sorts of horrendously terrible problems with real democracy.