In a democracy you have to horse trade. You have to compromise. If 51% want X and 49% want not X, then you don't implement X, you implement 51% of X, or alternately you give the opponents something else so everyone walks away a little happy and a little unhappy. The idea of total victory as a result of getting 51% jeapordizes the republic as a whole -- that's how you get secession and create chaos, by locking people out entirely instead of giving them some of what they want and some of what they don't want. Referenda aren't able to do this. They aren't able to put people into a room and say "OK, we will put a bridge here and to gain your support we'll move the library over there". That type of consensus gathering process is critical to governing, which is why long lasting forms of government require closer to 60% or even more, e.g. they add various hoops and checks and balances to prevent the 51% from forcing their way and excluding the 49%. These anti-democratic measures are required for democracy to work.

This is similar to leading a team. If you have 10 devs and 6 are strongly for something and 4 are strongly against, only the bad manager chooses to steamroll over the 4. The good manager will find some alternate compromise to get most of those 4 onboard, because you don't want to lose a large chunk of your team and need a broader consensus than just 50% +1.

Initiatives can impose new law without handling externalities well. It is possible to vote for "no new taxes" and "properly fund schools!" without balancing the tension between the two.

It is my feeling that initiatives are good, at least in theory, but the requirement for passage ought to be greater than 50%.

My personal experience however (very limited, it's based on a single referendum) suggests that the opposite might happen: back when the public smoking bans happened my local legislation was iterating through some moderately extreme approaches until eventually closing in on some rather reasonable compromise. But because the smoking fronts ran pretty much orthogonal to the usual party alignments they feared backlash from their followers and ducked out, handing over responsibility to a referendum. In this referendum, two groups were providing options, and it should come to no one's surprise that those groups where from the very far ends of the spectrum. It was basically a vote between two evils of you happened to be even the tiniest bit moderate. The vote was incredibly close, which means that both sides were quite successful at pushing their agenda: if your goal is on an extreme end, you'd want to compromise exactly as much as you need to reach 50%+1, and not the tiniest bit more.