Personally, I generally like the incarnate system.
After reading some of the other posts in this thread, I kind of see in my head what I think could work. Obviously other's opinions may differ.
Firstly: Make it so you need to do something else then just earning additional exp (like the original servers? Can't remember at the moment what was default) to unlock incarnate. That way the content can be made more avoidable, for those who think the system makes any individual toon OP, (Granted, you could always turn off exp right now, and then it would be the same result). Personally, I think it should be a combination of badges and other things. Something akin to accolades.
Secondly: Rearrange some of the incarnate abilities. For instance, as some have said, move/change the "Nuke" to a different slot, or get rid of it completely. To do this at this stage WOULD be a pain in the rump for those who have builds that require incarnates, but for now, let's overlook that. After the incarnate system is reorganized, add silly, more overpowered things, with their own, sometimes difficult, requirements depending on an ever increasing difficulty. (Make it difficult. Make it VERY difficult. I dislike difficult things, but despite this, I love this game, and think it would do well by it.)
Thirdly: Cake.
In my own admittedly unorganized mind, doing something similar to what I put above could, depending on the communities views, would allow the dev's to reestablish what defines as "end game" content and what's "additional fun content", and or a slight mix of both.