You're still mixing up the words "democracy" and "election (with universal suffrage)". They may be connected, but they are certainly not equivalent.
As people have already been pointing out: given HK's widespread anti-CCP and anti-mainland sentiments, a more direct election at this stage carries a higher risk to create a leadership that's more oppositional to the central government. This could generate more conflict between HK and greater China, which will be bad for Beijing AND bad for HK. In fact, this will likely be a lot worse for HK than it could hurt Beijing. The flaw in your logic is that you assume HK is a self-sufficient society that will thrive on its own if left alone; furthermore you assume HK's current difficulties are only caused by incompetent leadership and that incompetent leadership will go away once universal suffrage is realized and influence from Beijing removed. Unfortunately none of these assumptions stand up well to the test of reality. What is the reality? Well, HK's past, current, and future development clearly relies on a close interaction with the mainland. HK's problem lies in its economic structure and one can't put all the blame on CCP's political influence. In addition, as shown by countless real-world examples, a more direct election does not guarantee a better leadership or a better democracy, especially when HK is being targeted by all the foreign interest groups due to its strategic value of being at the doorstep of China. Only the most naive would believe that HK could truly be "left alone" from outside influence, be it Beijing or otherwise. Is that paranoia? I guess if you don't get it, you don't get it.
The current system, with just the election system changed, still won't solve the issues of a dysfunctional government that we've today - by right, the CE and its cabinet and the LegCo should be tied, that is, politically. Yet, because the current law forbid CE to be a member of any party, so whoever become the CE - even with universal suffrage of any degree - would not be backed with any solid political party or coalition.
In other words, any CE would be lame duck from Day One anyway. When you look at all other countries, the head of government would have its party and/or working coalition behind him/her, if not early re-election will be called or triggered, and whatever contentious issue at that time would be dealt with via such a de facto referendum...poll result will speak the will of the voters, so to speak.
On another note, when LegCo members can still equally trigger an early re-election, what you see instead is that those pan-democrats, them self-proclaimed "for the people by the people", would went on days of bickering on how many, and who, to resign to trigger a small by-election!
And should you think political parties have nothing to do with this coloured revolution, think again - pan-democrat politicians let student leaders use LegCo facilities for command centre, lodging and bathing, so don't ever think the "generals" live in the trench with them grunts, instead of the harsh live of
all participants they'd have you believe in their propaganda. That's of course just one of the many ties of these so-called "innocent students": it has been for a long time that the student unions provided the muscles and fresh blood to the "pan-democrats" and in return, training and funding and job opportunities (LegCo member's assistants).