The way I see it, the blood wards around the house are either fake- I can completely believe this because Dumbledore is actually rather manipulative- or a plot device filled with holes.
A lot doesn't add up about them. Dumbledore claims they exist as long as the place is considered home to Harry. The thing is, magic is clearly both vague and specific in the books. For instance, Snape owed a life debt to James Potter but the terms of it are never specified, thus why Snape fulfills it through guarding Harry. At the same time, it can be very specific, such as with dark magic (I.e. You have to have the will and feelings to cast any of the unforgivable; you can't just feel hatred, you have to WANT that person to die, to be killed by your own hand). As such, I kind of figure that blood wards, something sound more like dark magic, would specific. It can't just be "this is my home", you have to want the place to be your home, to consider it emotionally as your home. The problem is that Harry has never considered Privet Drive his home. Anytime he speaks of it he calls it "the Dursleys'", showing that he views it as the place he has to stay, a home for the Dursleys, but not a place he considers home.
Moreover, like you said, the wards give less than should be given. I mean honestly? The price for the wards are abuse, and the only thing the bloody wards do is keep Death Eaters out. The Death Eaters know the general area of where Hary lives. They are USELSSS. All it would take to kidnap Harry is to ambush him when he goes to the station for school. He'd be much safer and Grimgaud.
The price? Harry is abused by his aunt and uncle and Dudley is allowed to harshly bully him. The Durselys emotionally and physically abuse him. He's rarely called by his name, his parents are constantly insulted, and treated worse than a house elf. BOTH his relatives abuse him. How Venron does it is obvious. Petunia mostly does it emotionally, but a few times she does so physically. For instance, there is a scene where she attempts to hit Harry with a frying pan. The wards are not worth it! He'd probably be treated better by Death Eaters while he lives in a cell.
Overall, this seems to be a mixture of a plot device and glossing over. Rowling constantly glosses over controversially dark things. It's obvious that Harry is abused by it is played off as the Durselys just being mean. Technically, Harry should suffer emotionally and physically from the abuse, but all of it just plays him off as being a lonely orphan. I suppose it's because of the contrast between Harry and Tom: two similar boys with similar backgrounds. I think Rowling is trying to portray Harry as the boy who overcame his bad childhood while Tom let his consume him. If anything, Tom's reaction to his circumstances is far more realistic than Harry's.
Because of all of this, it is impossible, by the terms set, that the wards should even work and this is probably just a result of Rowlings several glossing overs. Harry is abused, but showing that too clearly means he won't consider the place home and this they won't work, so let's change his reaction to something less drastic so they do work. It's just a poorly written plot device.
It's also probably one of those things Rowling decided she wanted but didn't think through. For instance, she wanted Ron and Hermione together because of a petty reason, even though those two would realistically never be able to have a long lasting relationship without being at each other's throats. This kind of reeks of 'I want Harry here but I need to have a good reason' but her reason ends up halted baked because it logically makes no sense for Harry to live there. And honestly? Harry's father was a pureblood, which means Harry is related to several PUREBLOOD and possibly halfblood families. It's BS to put him there because "the Durselys are his only family". There's no good reason to have him there, making this a poor plot device, used just to give Harry some good background, but made poorly because none of the possible interesting character traits are used because it could seem controversial.