I would agree with that philosophy as well. Gods that are too powerful would change the nature of the game entirely, so players should absolutely have the ability to opt out. A "Godly Intervention" parameter at world gen would be a great idea.
An sneakier approach to god powers would be to give gods influence over invisible realms, for example, a Farm God would increase the chance of good crops, or a Battle God would increase a dwarf's ability to dodge or strike, but they don't do anything on the scale of "Set has disemboweled thine enemies, bro" and the player is never told specifically when or if a god is influencing events. All a player can do is build a Battle Church and pray to Battle God and hope it works. And like gods in the real world, the dwarf gods are generally indifferent and only impact events on a whim.
So if we talk numbers for a second, let's say a god's appeasedness level can go from -5 to 5. A Battle God's effect is to increase the % chance a follower's attack will hit. Regardless of appeasedness value, the Battle God will only grant this boon 5% of the time (Nat 20). Appeasedness influences how good the boon is, let's say 10% increase per appeasedness level, so if the Battle God's appeasedness is 3, 1 in every 20 of Urist McBattlePriest's attacks will have a 30% increase in accuracy.
Another mitigator could be that Gods are very specific about who or what they bless. A Farm God might bless one particular farm plot, or a Battle God might bless one particular dwarf or one particular sword or shield. Gods might also send figures like Hercules, Rama, Buddha, Jesus or Brynhild or items like the Ten Commandments, Holy Grail, Sword of Mars or Amulet of Yendor.
Also, since we have Good and Evil biomes already, what about God-biomes or Holy Lands? Each Holy Land would be different depending on the god that influenced it. For example, a Fire God's Holy Land would have rivers and pools of magma, a Farm God's Holy Land would be teeming with wheat, rice and hemp, a Craft God's Holy Land would be full of fire clay, obsidian and rock crystal, and a Love God's Holy Land would be full of oysters, rabbits and rose petals. Keep in mind, each God has two domains, so you'd really be getting something like a Fire-Love-God's Holy Land of magma and rabbits. A god should also be extra aware of any dwarves that enter their holy land and maybe also extra powerful in the vicinity.
Another thing that occurs to me is that gods should have personality generators just like dwarves do. If you're a fan of mythology, you'll often see gods having very distinctive moods and ways of dealing with their problems. Some gods might be extra indifferent, while others are nosy and try to intervene a lot, while others just smite dwarves out of boredom.