How stupid and weak Joseph´s stand is, just points towards him dying soon more. A soon-to-be dead character doesnt need an awesome stand :/

Regarding Dio´s power:
Well, he´s basically a vampire, right? Vampires gain strenght just by time alone, the older a vampire, the more powerful he is. Maybe that logic will be applied here. Also two more benefitting factors: 1.) As a vampire, he can just keep accumulating life power by sucking it out of people, and 2.) he has Jonathan´s body, which might act as some sort of fusion, multiplying his previous powers.

Lots of possibilities, so Im not scared that he might be some weakass idiot.