IMO the underlying problem is the exact opposite of what the OP states. I believe conditions are not different enough from direct damage. In most other games DoTs do great damage over a period of time. In GW2 bleeding/poison/burning last an incredibly short period of time so the time horizon of dealing damage is similar to DD. If the two damage delivery types are so similar of course one will win out. This lack of differentiation makes power the clear winner. Now what if we do an alternate set of changes?
1) Increase the duration of all bleeds/poisons/burns three-fold.
2) Reduce the damage per tick by 50%.
These two effectively reduce condition DPS drastically for the first few seconds after application. But if allowed to reach maximum duration they will do more damage than they do currently. Which leads into...
3) Make condition removal for Bleeding/Poison/Burning more difficult in some way. Be it a prioritization of non-damaging conditions first, or classification of these three into their own non-condition category with separate removal mechanisms.
4) As the OP stated increase the condition cap and make burning/poison stack in intensity.
It would be a pretty major change, but very much differentiate conditions from DD in that they would be more for dealing damage over longer period of time (and do this rather well) but clearly be inferior over short time horizons. With this difference you are making an inherent playstyle decision rather than the current decision which really doesn't change as much.
1a. Traits don't add enough depth ? You change how your character plays.
Most traits slightly alter numbers. If numbers are going to be altered do it in a big way, not 20% here, 10% there. Better yet, have traits that actually change how skills function on a core level. Traits do change how you play at a very basic level, but need to be stronger across the board so changing trait builds gives a noticeable change.
1b. Skills are too simplistic ? You have DPS, heals, Elites, CC. What you dont have is skill bloat like every other game out there because skills are across all of your possible weapons. "Oh look, another attack. That makes 42 now. Whoopey Now I need to add another skill bar." No.
Skill bloat is a real problem, but GW2 overcompensated. I don't mean more skills is the answer, but each skill needs to have more depth because as-is you use certain skills and sit on others either for clutch situations or its essentially a dead skill on your bar due to some sort of mob immunity. GW1 would even be a fine example of skill depth even taking dual classing and build wars out the picture. Look at what many of them actually do compared to the boring skill sets of GW2. I ultimately blame this on the boon/condition setup. Everything is so confined into these little categories they don't offer much depth. Binding Blade is a great example of a good skill that somehow found its way past the boon/condition design flaw.
1c. FPS twitch? Please no. This isnt Super Ghost and Ghouls.
All I'm saying is we either need some depth on the skills themselves, or depth of skills on the players having to aim skills manually. Either would do and I have no preference. I just want a solution to this boring "watch your character autoattack" game I feel like I'm playing. At least add some depth to autoattack itself so the act of doing damage is actually interesting.
I'm waiting on the update this month to see if I even bother following the game or not. And it has nothing to do with lacking an endgame grind.
1) Gameplay systems. Traits don't allow for enough customization due to not having a large enough effect on gameplay. Skills are far too simplistic and the dodge mechanic doesn't add enough to the game to warrant them being so simple. Either add more of a visceral first person shooter/moba type twitch mechanics or beef skills up to have more depth/complexity like other MMOs or RPGs.
2) Repeatability/Event difficulty. This does in a way play into endgame, but not in the way most interpret it. Replaying existing content is fine, but if the difficulty isn't properly tuned you either steamroll content or can't do it due to not enough players. I'd love to replay low level zones but the tuning is so off there's no reason to. More lasting impact on the world would also add more interest/motivation for players.
I would remove the focus on autoattack this game has been designed around. So often you're waiting on cooldowns or not using a skill because there's no point in using it. We need shorter cooldowns and/or the 2-5 weapon skills to all do more damage than auto. This is already the case for the most part with Elementalist and Warrior (the two professions that probably have the most polish) but let me tell you, as a Necro with a dagger in the mainhand you have maybe one weapon skill that is worth using over autoattack.
I never thought I'd say it, but I do miss WoW in this regard. At least in WoW soloing and the act of doing damage was actually interesting- you'd use at least 3 skills, which is more than I can say for most professions in GW2. With the condensed GW skill bars it's imperative to make sure each weapon's combat flow is properly designed, otherwise you're stuck with autoattack and using the occasional other skill for a defensive or utilitarian purpose.
This isn't really a problem when you're doing big events or dungeons, but when you're just killing by yourself and don't need any utility or defensive skills your skillbar quickly becomes mostly useless buttons...