Platon said "the best gouvernment imaginable is a loving and reasonable dictator". And of course, from a purely practical point of view and assuming the dictator is really devoted, loves his people and thinks rationally - it could work. As long as this guy is around, things would run smoothly, at least for those who share his views (for example, think of the guys who want universal healthcare - what would they do in King-Emperor McCain's America?)... But the structure of the country would already be prepared for dictatorship. So, assume King-Emperor McCain is replaced after his death by his second in Command, Empress-Duchess Sarah Palin. What could the people do against that? It's an interesting mind game, but it has lots of "ifs" and points towards a catastrophe really fast.

You know, in my country, this mind game was put into work once. The so called "Weimarer Republik", a truly democratic gouvernment, was founded after Emperial Germany lost WW1. Every party would be heard, no minimum-percentage-rule, there were dozens of parties of all sizes in the parliament, constantly forming new alliances. Only if a lot of them agreed, they could vote for a new Kanzler (that's how it worked). The economy wasn't great, Germany was still suffering from crippling war debts, there were so many mentally ill veterans around who were bitter and couldn't find work - a mess. The great political freedom led to parties of the far right and the far left gaining power - you see, in today's USA, even mentioning somebody is a communist is deadly to him because the media say so, back then, communists were just another faction.

Anyway, there were many cases where the parliament couldn't meet a decision for shit, too many opinions. That's why the President had lots of emergency rights he used often, for example granting the Kanzler additional powers. The President was Hindenburg back then, a senile old man. When a young, promising Kanzler came along, one who seemed to be the right man to restore the country's greatness and power, who had solutions (more like "solutions") for the problems that presented themselves, people were enthusiastic. When this Kanzler said that communists wanted to overthrow the gouvernment and he needed emergency powers to stop them, the President granted him dictator-like rights. Well, of all the people, those rights should not have been given to Adolf Hitler.