Actually you are right, the TS does not remove any dot right now, and most of times it does not work, however today i made a 29k crit from using a 3/5 TS with 3 poor dot's
Yes I've seen that, in order to make 1kS work you have to apply a lot of DoTs, even with lvl 1 even though you just need 1 DoT to make 1kS work with that level. It's not supposed to work like that: lvl 1 > damage of 1 DoT, lvl 2 > damage of 2 DoTs, etc.
Moreover, the Backstab has to be fixed too, it just reduce the enemy's HP visually, but it actually has the same ammount of health (at least with monsters, I don't remember if that happens with players too).