Your first sentence is bang-on about the effects of first-past-the-post. But I think that it is a good idea to let one party actually have full swing in its decisions from time to time.

As geeks, we always complain about "design-by-committee" situations. I think that a bickering and fragmented parliament falls right under the same label. Another phrase that comes to mind is "analysis paralysis", except as applied to government decisions.

In general, politics are notorious for being populist and catering to the superficial wants of voters. An "imbalance" of representation that first-past-the-post allows may actually work against that populism and let gov't pass unpopular measures that actually do the job better. And I think that far too many good ideas are not even considered due to not being "sexy" enough to sell to an average voter who may not know what "fiduciary" means.