>For that matter, this shouldn't just change at 50% either - having parties representing 50% + 1 dictate policy still leaves half the population subject to the whims of a narrow majority.

One should also note that even if one party in Germany were to have more than 50%, they still don't have a very stable power:

Each member of the parlament could vote against his party. So for a stable gonverment, they would need to have a bit more than 50%