Yeah Dennis had a lot of protential. I guess they just liked the idea of him hanging around the house being like a close friend to Cordy without him actually getting involved in anything else. Because of his introduction to the show and being a Ghost and all there were certain limiations. I feel he was partly there to signpost that this was a new Cordy who wasn't creeped out by the unknown.
Trouble with Ethan was you either introduce him as a the big bad for the season (which I don't think he would have suited) or you limit him to a few episodes per season or something. I guess he was a good Bond style villain.