I don't think we rely purely on impact statements for this, there's plenty of parks / nature reserves where building is simply not allowed. And of course zoning heavily restricts what can go on land where building is allowed.
I believe (and another comment mentions here) the California law is unusual because it allows private groups to request additional reviews in addition to the government environmental regulators. And as a result of this, groups that oppose projects for non-environmental reasons will take advantage of the complex environmental impact process to drag out anything they don't like. So a straightforward change would be to leave the environmental review to government agencies and not private groups.
To me it seems like it would make more sense to address these issues at a regional level - like apartment buildings can go here, houses can go here, and looking at the general impact that those developments would have - instead of doing a very protracted process on a per-project level. At least for common things like housing, maybe not chemical factories. Maybe someone who is more familiar with public policy around urban planning can weigh in on how other locations address these problems and if California's approach here makes any sense, or if it is just some unintended consequence of laws that were maybe a little too broadly-written.
Of course; don't do them. They are worse than nothing.
Though note that part of the idea of "throwing the baby out with the bathwater" is that it's preferable to have both the baby and the bathwater than to have neither, which obviously isn't the case here.
The idea behind the saying is that the baby has value, and isn't intrinsically linked to the bath water that you want to get rid of.
To be more concrete: there is value in protecting local environments. If the problem is with environmental groups using reviews as a "weapon" (which is an inappropriately loaded term designed to cause a strong emotional reaction), then we should reform that problem.
What we should not do is to allow un-reviewed, unfettered development without any space for environmental advocacy. Balance is necessary.