DoTs are definitely underwhelming. They do not deter me or alter my strategy much at all unless it's a Vader led team, and even then it's not a deterrence, just an attack priority change.
I'm not a fan of the 'on every action' idea as a normal effect, mainly because it conflicts with the concept of it being a Damage Over TIME. That sounds like a neat, if situationally useful, leader ability or a 'unique' DoT effect (see below).
I really like the idea of potency modifying damage. It's simple and, most importantly to me, it makes sense conceptually: the more potent the poison/curse/disease, the worse its effect and harder it is to resist).
I think a number of DoTs should immediately dispel when the character that inflicted it is defeated (Vader can't force-choke you when he's dead.) Some should stay (the bacterial infection from the Gammorean Guard's axe doesn't care if you killed him.)
I also think increasing the damage done with each turn and/or stack (either linearly or exponentially) would provide a lot of excitement: i.e. Make the number of DoTs inflicted and the number of rounds they last be of strategic importance in character selection (do I want 1 DoT for 3 turns or 2 DoTs for 2 turns?)
The biggest change I would like to see would be to add different character-specific effects to some DoTs, like some Thermal Detonators do: This character's DoT lasts 2 rounds, then stuns, this character's DoT last 3 rounds, then fractures, this character's DoT lasts 2 turns and is inflicted upon another enemy, this character's DoT last 3 rounds, then goes away with a whimper because he's weaksauce, this character's DoT ignores protection...
All this said, however, I've done enough game design to know how incredibly difficult many of these ideas would be to redesign into a live product. The game balancing would be a nightmare, especially given the number of characters who seem to have DoTs added to their kit as an afterthought. Having the damage done related to potency seems like it'd be the easiest concept to balance and implement.