I also agree with @lexa that I haven’t see any cases other than ATOM 2.0 where a decent proposal was vetoed because people disagree with it, please correct me if I’m wrong.
But I think it’s important to distinguish the cases when one just disagrees with the proposal (aka “I do not like the idea behind this proposal”) and when one thinks this proposal harms the ecosystem (aka “I do not think this proposal should have ever been submitted in the first place”). IMO there should be some penalties for people who submit proposals which are not supposed to be subject to governance (two cases I know are 1) scam proposals and 2) stuff like Bostrom chain did, with their promotion of their airdrop - even given that it was legit, this isn’t a subject to a governance and is an attempt to use governance for non-governance reasons).
For example, imagine if there’s a validator who wants to get free advertisements and submits a proposal saying how awesome they are, or something similar (this example is an extreme one, but it should show the idea). This is a case where people use governance for totally non-governance reason, and we should punish people who are trying to do things like that. Just voting NO would make it fail, but won’t punish those submitting it.
If on the other hand we decide to burn the deposits of those proposals voted NO upon, this gives a message to the depositors: “we do not like the idea and you should be punished for even voicing your opinion”, which would totally discourage anybody from submitting something when they are not sure if it’ll pass.
So for me, having No/No with veto split and deposits burned only if the proposal is vetoed sounds like the best approach, and I’d keep it this way.