To be fair, that’s actually how the shareholder system works in practice most of the time for public companies. Most people are not buying individual stocks, most companies that do buy individual stocks give their voting rights to an individual at the company with relevant expertise, and a huge portion of stock purchases are via ETFs (S&P 500) which delegate their voting rights to the fund managers.
The problem isn’t delegation itself, it’s the lack of economic incentives around it. If the voting rights of an ETF are delegated to a moron, the ETF performance will suffer, investors will suffer and leave the fund and the ETF managers will suffer. So if voting rights are poorly managed, then the delegated authority for the ETF voting rights is replaced.
We need direct economic incentives tied to voting. If the totality of proposals that your dRep votes to approve result in a bad outcome, you as a delegator need to be financially punished. That is the only way to achieve a merit based system. The exact same thing needs to hold true for stake delegation, if you delegate to an incompetent stake-pool, you need to be financially penalized for their incompetence (slashing). This can be quickly added without changing the liquid stake model by having the slashed amount come out of the delegators reward account. At the very least, this would force delegators to be active to withdraw their staking rewards constantly if they wish to delegate to an incompetent stakepool (in which case why deal with the pain of this, they will likely just delegate to a competent stakepool to avoid this headache)