incentivize responsible drinking. Should is defined as "used to say or ask what is the correct or best thing to do"

Alcohol inhibits decision making. Dram shop works on the following assumptions: (1) Drinker is leaving his or her home, point A to go to point B and will consume alcohol; (2) At point B; if Drinker consumes too much alcohol, all decision making becomes inhibited; (3) If drinker returns to point A while intoxicated, there is a high probability that Drinker will cause injuries and damages to him/ herself as well as innocent individuals who cross drinker's path; (4) Providers of alcoholic beverages should be sober and should know when they serve a visibly intoxicated individual more alcohol; and (5) As a society we want to discourage over serving intoxicated individuals and then exposing them to the general public.

If you are a restaurant or a bar, and there was no disincentive to over serve, you would over serve your drunk patrons to make as much money as possible. Good for the bar. Bad for the drinker. Bad for the rest of the population.

For house parties, everyone wants to have a good time. If the home owner pays no attention to either (1) how much guests drink or (2) how they get home, then Bob throws a killer party with an open bar and lots of kegs. Everyone keeps their keys. They get drunk. At 2 am stumble out to their car and proceed to drive home. Some will make it home w/o issue. Some will drive into a field. Some will get into a head-on wreck. To encourage responsible behavior, we have dram shop laws. Now if Bob gets his guests wasted and they drive home, Bob becomes responsible for their actions. Bob can mitigate his responsibility by doing some simple things: (1) taking the keys of all of the guests when they first arrive; (2) restricting and monitoring alcohol consumption; (3) having guests sleep over until they are sober; (4) not serve visibly intoxicated individuals.
Bob does any of that and Bob does not have liability. His guests still have a good time. Drunk drivers are kept off the road. It's a win-win. That is the correct or best thing to do. That is why dram shop laws are put in place universally across every state.