It seemes that a lot of folks are arguing from very narrow positions - which is OK in some ways, but I think limiting in others.
It seems that from a "people's mandate" point of view the closer you can get to direct popular mandates the more democratic one is.
BUT
There are two things that are traditional checks against this the way I see it:
1. Convenience (Meaning the population may not want to participate on a day to day level)
2. Rule of Law (There has to be a uniformity and consistency of a legal system and a method of change to preserve this)
And one benefit of a democracy - is that the "rule" is tested against the will of the people AND through that governmental compliance and legitimacy is gained. And with a bit of skill, stability.
The farther you stray from this, the less democratic you are - and it is arguable to achieve the convenience and rule of law you have *some* stepping away - but it trades off democracy.
So ....
Our current method of electing factions are removed 2 steps form direct democracy: 1 step because it is a representative assembly, and another because the people are currently not allowed to vote for individuals they choose. (and the actual RA makeup is determined by an internal vote in the faction itself to which)
The Chancellor is 3 steps removed since it is elected by the RA.
So - Once could argue that to make the system MORE democratic (and gain more legitimacy, and other benefits of democracy), the two institutions ought to be moved closer to the people. And indeed they can be without damaging rule of law, nor will it damage convenience.
So ... backing away from purely partisan questions, the real underlying argument seems to be:
"How much democracy should the CDS have?"