You're basically right about DMB
They're a jam band live and were hugely popular at colleges and in particular among frat types who drink a lot of Natty Lite and roll cone spliffs (and many of the people who go to their parties). That said, the second-most-serious musician I've known is really into them for their musicianship (Carter Beauford on drums in particular -- come to think of it all three of the most serious musicians I know have been drummers.) Also I'm supposed to cut them a little slack because they're from the University of Virginia but yeah,they're pretty bad... and they haven't been popular or relevant in 15 years.
It's understandable that you wouldn't have heard of them: they're lame, they're foreign (I had never heard of Midnight Oil before you), and they're tailor-made as background music for college students for whom Phish or the Grateful Dead are too harsh on their Beast Ice buzz. Blandness is part of their appeal.