I really do not like Dawn. But do I think she should not have happened? No.
The idea behind Dawn is a very good one. A character who helps show how mature and responsible the Scoobies have become. She was also needed because the Scooby relationship was broken during seasons 6-7, and the audience needed to see Buffy have family to protect. However the execution was terrible, IMO, Michelle Tratchtenberg is a pretty awful actress (to be honest I haven't seen anything else she was in) and whenever she was in a scene with Sarah or James she would just seem awkward and out of place. Much like the rest of the characters, Joss and the writers did an awful job planning her character, I actually didn't mind her in season 5, but in Season 6 she was the same annoying character and this season is why I don't like her. Season 7 Dawn is okay, but that season didn't do anything right, they develop Dawn in the beginning and she just gets brushed aside in the second half.
The only way I can think of making Dawn better was to get a better actress, have her do something in Season 6 besides be an annoying pain in the a$$, and give her a smaller role. I think Joss and the writers pushed Dawn as such an important character, but she never delivered any successful stories, she has always been a support character and never lived up to her own hype, IMO