There is a famous quote - I believe from Winston Churchhill - "Democracy is the politcal system there is except for every other one", I paraphrase, but thats the general idea. I think that people vote with their feet. Observe the migration patterns globally. People are leaving despotic regimes, and risking life and limb to go to liberal democracies. Democracy isn't perfect but the freedoms of democracies allow self determination and the possibility of pursuing perfection.
No, Democracy should not be replaced, because out of all of the political systems that we have, it is still the best one with the least amount of problems. Single rule is too likely to be abused by a dictator. We need to strengthen democracy so that the whim of the people cannot override a strong constitution.
Democracy in the United States certainly has its flaws because of the favoring of the rich over the poor and the way in which elections are conducted and held. Still, every system has its flaws and we have not seen another that works better so we need to have this one tweaked and made more fair.
Democracy should evolve with the times. Some things that were started in 1787 have become obsolete and should change, such as America's electoral college. It is only a matter of time before votes in elections are cast via the Internet rather than at ballot boxes. With so much interconnectedness, more and more direct democracy can be achieved with simple majority votes.