If analysts are discounting the value of membership to a watchlist because of the amount of noise such as what you're suggesting, then the watchlist isn't going to help the organization that's keeping it.
From a strictly practical standpoint, there is an incentive to keep watchlists small, focused, and accurate, otherwise they lose meaning.
I think they serve a different purpose: to be able to manufacture an excuse when it is convenient. We're far enough past "innocent until proven guilty" that we've manufactured a plethora of new tools and processes to support nearly any unconstitutional actions against citizens.
When you create an us/them narrative, you might not be the only one who plays into it, just remember that.
Perhaps if more people played into that, we would not be in this situation.
edit: Zikes beat me to it, and said it better.
I think there is no incentive to keep watch lists small or focused or accurate. In fact, there's a huge disincentive for that. If some name (or other identifying info) gets on a watch list, and then someone makes a judgement call to take that name/info off the list, and then the person identified by that name or info does something violent and/or stupid, whichever agency the judgement caller works for, and the call him/herself would come under enormous, very unpleasant scrutiny. The 9/11 thing about "failing to connect the dots" almost certainly weighs heavily on every one connected with watch lists.
There's zero incentive for any outsider to call for a name or other info removal for exactly the same reason. What if...? becomes the single overriding concern.
The reason the lists exist is to cover FBI and DHS bureaucratic ass if some long shot "terrorism" event happens - "Hey, they were on the watchlist - we connected those dots!"