Maybe I was unfair on Ennis. It's one of the few places in Ireland that I couldn't wait to get out of, but quite likely I was just unlucky in my experience of it. Sounds like Iviehoff knows it better, so I'll withdraw my reservation on that score. (Though Iviehoff, is Lisdoonvarna not a tourist trap par excellence? at least that's my recollection, from a brief visit on a school trip.)
It really depends on what you want to do. If your main thing is to drive around the coast and you're not bothered about seeing Dublin, then maybe your original plan is OK. Just do bear in mind the varius remarks about how much time you could be spending driving. Also, if you do try and drive along the coast much of the way, which may not always be possible, you'll be on minor roads and the driving will take even longer compared to the quickest routes between the points you have mentioned. The main road between Dublin and Waterford is well inland, and even if you head east from Waterford to Rosslare and Wexford, the main road back up to Dublin (N11) along the east coast is also actually well inland for most of its route, and probably not a very interesting drive, so I'm going to stick to my position that Waterford does not add much to your trip. The night in Kenmare on the other hand would indeed let you spend a bit more time in the countryside without driving around frantically every day. The west Cork coastline on the way between Kerry and Kinsale is very nice.
I would suggest seeing if you can get good maps of Ireland and comparing them to what you can see in a guidebook in terms of places of interest, you could map out an interesting road trip, and get an idea of where would or wouldn't be near the coast. Google Maps is not really very convenient for looking at small country roads. Have a look at www.irishmaps.ie . The regional maps available at http://www.irishmaps.ie/productlistingM.cfm?SeriesID=10 might be best for you; the more detailed 'Discovery' series is also available but you would need quite a lot of them to cover the various areas you are planning to visit and it might not be worth your while.
If on the day you return to Dublin you have the time, you coulld consider going through the Wicklow Mountains, if possibly stopping at Glendalough and heading back to Dublin via Sally Gap. Very scenic, but it would add at least an hour to your journey if you were coming via the coast and if you're coming all the way from Waterford at the end of a long road trip you may not be in the mood.