Doesn't seem like you have nearly enough cards that are worthwhile to bounce to justify having Dust Elemental. Dust Elemental works really well when all the creatures you're playing have beneficial "When this enters the battlefield..." text, in which case you'd also want to run at least one other card that can bounce as well.
Yeah, I don't really do little 1/1 creatures. However, Dust Elemental is a pretty low mana cost. Chances are that by the time I play it, all the removed creatures will be restored in 1-2 turns. Also, it can be really useful to pick up and put down your creatures mid-game, removing things like Ice Cage and Arrest. While is is a temporary weakness in defense it can free enchanted creatures.
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Actually, I agree with you. It's rarely good to bounce creatures in an enchantment deck, especially 3 at a time. Seems like it would waste a lot of spells if played late-game.
Any suggestions for utility land? My deck is in desperate need of land but I want some neat side-effects.