My problem isn't that Byrne rebooted Superman. It's that he went about it the wrong way.
Superman, to my mind, works best as a man of two worlds, Krypton and Earth. He embodies the best qualities of both but can never fully belong to either. This has been done to great effect in the Reeve movies and on the the WB animated show. Byrne's decision to make Krypton as horrible a place as possible so there would be no attachment to it whatsoever gutted the character, to me. Without that love and respect for his heritage, what is Superman? Just a Joe Average in tights, another Peter Parker. The grandeur and sense of being more than just a Kansas boy was deliberately gotten rid of. In its place we got a farm boy who would never grow away from that old mindset, and who had every reason to hate where he came from. For being so quick to bash the earlier Superman for being too Kryptonian, Byrne sure wasn't shy about plunging Superman into an equally harmfull opposite extreme.
The Luthor revamp was interesting at first, but over time, and especially in the last decade, it proved to be a creative dead end. Over and over again, Luthor was made so untouchable that he could never be exposed or defeated, and any exposure was blamed on evil clones and the like. He never grew or evolved as a character, and he ended up being really boring and static. And time and again, Superman was made to look stupid by never being able to expose Luthor. It's like DC didn't want to be bothered with growing away from the original Byrne setup. They just wanted to stay stuck in 1986 at all costs, and it was reflected in the stories.
The revamps of old characters was just pathetic. The assembly line of Supergirls has been hopelessly convoluted and hard to keep straight, especially the Byrne Supergirl. Brainiac started off with the stupidest of new origins and became another convoluted, confusing mess. The assembly line of disposable Bizarros, ending with the bizarre fantasy-made-flesh we now have? Worthless. The various General Zods from Byrne onward? Gimme the movie Zod any day; the post-Crisis comics versions are stupid beyond belief. And don't get me started on the two Kryptos....
And ultimately, the biggest problem I have is that Byrne made a point of sucking all the epicness and scope out of Superman. The stories, right from day one, were so down-to-earth that there was rarely ever any sense of lift, of greatness. Occasionally there've been some Superman stories that are truly great and worthy of the character, but they're the exceptions, not the rule. More and more DC opts for overwrought soap-opera contrivances. Like making Lois a blackhearted, emotionally abusive spouse who treats Clark like garbage and is always ready to walk out on him for no reason whatsover. Like giving Clark job woes and having Superman such a whiny, self-doubting loser that he has to seek therapy because he can't cope with being a superhero. Like piling on a mountain of dead-weight supporting characters whose sole purpose is to disguise the fact that Superman himself is being badly written. Like sticking the books in an "all-event, all the time" format where shallow, short-term gimmicks are what drive the series. And so on. DC doesn't WANT to write good Superman stories. The minute you get a book like Birthright that DOES try to bring back the greatness of yore or a book like Matt Wagner's Trinity that shamlessly depicts Superman as the herpoic, inspiring man of two worlds he's supposed to be, DC does everything possible to pretend those projects don't exist and leaves them to rot, supporting the latest regurgitated tripe instead. They really don't get Superman; all they care about is staying stuck in 1986 and that's that. What did they take from Birthright? Krypton's design scheme. They didn't even try to look at the richer persona Waid gave Superman. THe commanding, assured Superman of Trinity (the best post-Crisis Superman story to date)? DC wouldn't be caught dead using that treatment of Superman. They're too busy using angst-consumed Peter Parker-Lite.
A couple years ago, I read Alan Moore's Supreme TPBs, and I was shocked by them. Even though he was using a Superman analogue, his stories were genuniely, truly Superman, with updated takes on the classic characters that truly worked. Had Superman been rebooted in that fashion in 1986, the character would almost certainly not be in the hopeless mess he's in now, and the books would have been better off in the long run. Instead, after the dual failures of two miniseries that deserved far better fates, we're all pinning our hopes on All-Stars Superman to save the day. But again, I have to ask: What guarantee is there that DC will learn anything from it?
I agree 100% with EVERYTHING you said--you said it all.