The Wizards were in a situation where they had little talent. Take a look at where they were prior to all of the moves you mention.
MJ had not decided to return. Lue was not signed in FA yet. Thomas had yet to play a minute. They took a HS kid with the 1st pick. This should have signaled to everyone they were in it for the long haul.
Ill address your points 1 at a time.
1) Why should they have taken anyone over Kwame? Gasol had a better year than any rookie last year by far. Chandler wasn't spectacular and neither was Richardson. Kwame played a lot less minutes than any of these guys. He is a HS kid and though expectations might have been a little high on him, the Wizards were in a position last season to not force him to play, unlike the postition the Grizzlies, Bulls, and Warriors were in. We could make this a debate over the best way to bring in a rookie but the fact is unless they get time it is hard to gauge what they are going to do. O'neal is a good example of what no playing time will do to stats.
2) Jared Jeffries was a great move in mu opinion. He is a winner, and he is versatile. He has great length and is a smart ball player.
3) Juan Dixon may not have been their first choice at 17 but he is a fine selection. Alexander needed a change of address. He was supposed to compete last season for the starting SG spot and spent significant minutes on the bench trying to find his role on the team after he didn't really do much in training camp. He was a redundant player for the Wizards at the SG spot because that is all he could play. He tried hard to fill in a SF but he just could not defend the position. Juan Dixon is a winner and he is also a very smart ball player. Are you starting to see a theme here? He can defend the PG position and also play some SG as well. His defense is not in question, just whether he can run the team. The Wizards offense is a pinch post offense, that is similar to a triangle offense with the cuts and positioning. A traditional PG is nice but his defense abilities are more important.
4) Larry Hughes is 6'5" and he can play the point. The main thing though is that he also is a versatile player. The Wizards need a big point guard. Hughes has put up statistical numbers that are impressive. WIth Rip Hamilton, who has played some point as well the past couple of seasons, he can team with someone in the backcourt that can handle the ball as well. He won't have to be the main ball handler without help. The same goes when he is team with MJ, Dixon, or the other two PGs the Wizards have. He fits the Wizards offense scheme. He is also a young guy at 23.
The Wizards also picked up Grizzard in this past draft as well as Navarro. Navarro was selected because the Wizards needed to select a foreign player that would not come to the US right away. He is another player that can float between the PG/SG spot. Grizzard is a tall and very athletic player that has shown the ability to also be a very versatile player in college playing a point forward type position.
The Wizards had to address their athletic ability. They did this with players that are winners and that are versatile. They now have guys that can play multiple positions and that can fit in the offense scheme they have on the court. You may want to knock Brown but I am not sure why you would want to come out after one year and judge him. There is still a lot of time left for this kid to prove himself, whether you agree or not. The Wizards competed for the playoffs last year, without their number 1 pick playing a significant role at all. They filled needs at SF and PG this offseason as well as gathering more talent. It might not all work out but even the 3 year deal you blast them for giving Hughes is short and reasonable enough that if it doesn't wortk out, they have the option of moving him. I have a feeling though it is all going to work out.
You can also assume that the Wizards are building their team without the thought of MJ playing at all. They are.