I agree. There are changes which could be done to squeeze more stuff into the existing blocks, but it's like a max 20% improvement.
Fundamentally, there's no point owning a UTXO smaller than the cost to spend it. Below that, some compromise is always necessary, such as:
1. UTXO shared with a group of friends/community.
2. Trust, but if they screw up/over they can't steal your funds, only burn them.
3. Trust, but if they fail it costs them far more than they gain.
4. Trust, but they can only try to rug *everyone*, not you specifically.
5. Trust, but you and your friends can combine to pay fees to get a UTXO like #1.
You can add reputation and anonymity in there, you can combine these options, you can play with the balance (e.g. size of bond required) but the minimum UTXO size seems to be a fundamental limit. And it's almost certainly one we will reach for many people.