One of our local venues has singer/songwriter night, in which several promising local acts play half-hour or so sets (depends on how many of them are scheduled). Sort of a step above open mic. I think they sometimes do semi-open mic--meaning that the performer has to contact them ahead of time and probably has to either play fo them first or submit a recording--with very shorts sets as an opener, and then if there is a good response, they might eventually make it to the longer set as a featured artist.

Requires more work but keeps the bar at a reasonable level.

If you really want a true open mic, though, I hate to see the institution bashed so badly. Open mic was invaluable for getting me over a crippling case of stage fright and learning not to talk too much, to talk into the mic, etc. But people do need input--it's dangerous if you let them go on forever in abject crappiness.