When half or more of the people you know have a DUI, it's only a hassle, it's not embarrassing and carries no social stigma causing you to be less likely to avoid it in the future.
That's only a problem if the penalty for DUI is "only a hassle".
With the deterrence effect of stigmatizing DUIs diluted, all they can turn to are draconian laws -- soon we'd probably have a 3 strikes law for driving. Then we'd have a new problem of people driving without licenses, insurance, an increase in stolen plates (because you can't get your tabs without a license...).
First: I very much enjoy a beer or six, some wine or a single malt, and have absolutely no problem with people getting drunk. That said, I'll chime in with how we have reduced the problem in Norway: there are sensible campaigns to teach people to avoid driving when they have drunk alcohol, and conversely, avoid drinking when they are planning to drive afterwards (feel free to enjoy a few when you get home). Back it up with laws and *real* consequences. If this actually is a problem for you in your everyday life, maybe you should examine your drinking habits. The default state of most people most of the time is not "tipsy".
It's perfectly possible to have such campaigns without preaching, and without acting like some of the more irrational elements of MADD. But yes, the law should be harsh. If you turn out to be generally unfit to drive, you shouldn't have a licence, no matter what the cause. In Norway, where getting caught drunk driving have very real consequences, it has greatly decreased drunk driving and connected accidents. Not even the most populistic of our political parties argue that the current situation should be changed. The follow-up problems you mention (people driving without a licence and similar), while rare, are treated as any other criminal activity: fines/jail, and confiscation of property used to perpetrate the crime. I don't even know what to say about your "standing up to the man" parallel, but I did get a chuckle out of the vision of an entire drunk neighbourhood "standing up to the man" while driving :)