Just have a look at the latest vote on EU ties. They want to keep the economic benefits but to restrict foreign workers, except the EU is never going to accept that. It's like the British, they want the cake and eat it too. The people can have their dream and vote on whatever they want and express themselves, and that's great, but at some point someone has to go back to reality and make compromises.
I would argue it is the parliament job to transform the people's will into realistic laws. At this point, the parliament could either water it down or go full Brexit. The latest vote just confirmed it took the "correct" decision by watering it down.
The EU bureaucracy's near-fanatical, unbending approach to what it wants doesn't make anything different "inconsistent", "a dream", "unrealistic" or "not reality". That's the sort of attitude that is inflaming serious anti-EU tensions across all of Europe and will eventually cause either the EU to crush European democracy itself, or the EU to collapse chaotically.
Indeed, the "watering down" you mention was a violation of the Swiss constitution and has led to quite serious political tensions, including a new referendum that's trying again to force the political class to actually implement referendums the EU doesn't like.