To be fair, MK himself struggle to live up to the standards from the 70's and 80's. I don't know too much about the works from the other guys, but I remember I used to put Bernadette from Boston '79 on much more often than most MK tracks. So, my bet is that DK would be able to write something that would be considered good enough. What's the matter, baby is also just as good as most other DS tracks. I can't see any monster hits from the other guys, but tracks that are "good enough" to deserve a spot on a DS record with the right arrangements? Sure, no doubt in my mind about that. It's not like "the master" is untouchable. He's human, not a God.
We really need to ask Mark about that, and that would be one of the questions I would personally ask him. He never ever talked about this whole democracy thing. But I think it's pretty clear that he's not a democratic leader even today... He hired the best musicians in the world that can come up with brilliant arrangements on the fly and sometimes even compose parts of songs for him, but all the credit always goes to "the master" because without the master it won't happen at all. It's like a movie director... How many people work on a movie? Can't even count, but it's a Quentin Tarantino movie. Or Andrei Tarkovsky's movie.
I think it's a personal thing and there are writers who allow only their music even on their band's record, prime example I always give is Fleet Foxes (because it's a modern single songwriter band). I think only with a single writer you can achieve this unmistakable consistency and sense of style, whereas in bands with multiple writers music usually go all over the place. Again, like in a movie with multiple directors.
And inevitably, having multiple writers, you are going to lose a bit of personality and focus. From John Illsley's book, it's also clear the band started with Mark's songs in mind. Everybody agreed on these terms, and who didn't agree, well we know how it all worked out... David said that he composed songs with his brother, however, I doubt that MK was selfish enough to straight-up steal writing credits from David. So I think he composed all the songs on his own with maybe a little help from DK (like the help from his current band members).
Heck, what about even Mark's recording studio? How many people worked on it? It wasn't Mark himself who built it, made plans, bought equipment, and whatever, but it always will be known as Mark Knopfler's recording studio because he owns the thing. If you recognize MK as the leader and trust him, you'll give up your musical ambitions, or any ambitions at all, and just work with him. MK may not be a God, but man what an amazing leader he is. And it's not even about being a yes man, but more about respect.
So I think the question is not even about the quality of songs. It's more about who owned the band... Take MK away and Dire Straits would certainly be one of the forgotten bands if existing at all. I think it won't even exist. Everything depended on this one guy, so I think it's fair that he would demand some respect in return. And respect also means that "good enough" is not a valid reason to put your songs on a record just to fill it.
And that MK struggles to live up to the standards from the 70's and 80's, I wholeheartedly disagree. Nobody could repeat their success from the most fruitful years, especially songwriters. You can barely find a songwriter who lived up to his younger standards. You can argue that Mark's recent songs are good, which they are, but they are not "Money For Nothing". Sure, but they weren't written by 35-year-old MK, we now only have the older MK, and 35-year-old MK will never happen again, it was a different man.