Yes, the Nether is completely screwed up. What people keep forgetting is why Notch originally told us he made it. It was for 1) Fast travel and 2) a Halloween-themed update. When he first announced it it said, and I quote "A brand new hell world for fast travel. Portal in, move ten meters, portal out, and you're hundreds of meters away." That doesn't work reliably (unreliable links, double-linking, obscure behavior) and so by his own definition of what he's trying to do, yes, it is screwed up. BTW I am well aware of the obscure workarounds that folks have created; don't pretend that it isn't messed up. Anytime you need workarounds at all you are dealing with a broken mechanic.
I'm not even sure it ever CAN work. The more people explain the 8:1 ratio and the chaos that it creates the more I think that he should forget the nether idea completely (at least as the primary means of teleporting) and do a serious re-think of portals. I think he should give up the nether two-step and just find a cool way to link real world portals directly. There's all sorts of interesting things - crafting runes, using redstone, heck, just right-clicking and typing in an x/y coordinate, that would work better than the crazy portal in walk portal out system. It doesn't work. I think he just tried it because it happened to fit with the Halloween theme (hell dimension) and teleporting was clearly needed, so he combined them. It was a noble effort, I appreciate his effort, but it just doesn't work.
Also, it is true - there are WAY too many Ghasts now. You can't really even go outside without world war three breaking out - its insane. I for one don't care if I ever go there again - I'd rather that portals were surface linked and just cut out the pointless middle realm.