The Night Light, already one of those craft-able magic tab things that garnered some heavily mixed feelings amongst all the players since its introduction back in Reign of Giants for singleplayer Don't Starve, no doubt is even more forgotten now with all the new high tier lights now available in ANR in the form of mushlights and such. If it wasn't already regarded as pretty useless by some people before, it certainly has more leaning toward that sentiment now.
Indeed, it is hard to even figure out how to talk about this; some things that we would consider bugged about these structures are probably features, and the suggestion forum... has a tendency to be a bit less visited for feedback in general, and is mostly viewed for the newest content / ideas.
So what do we do about them?
Well one of the first things I would suggest to carve out a better existence for this would be first to stop treating like an actual fire and make it unaffected by ice, flingos, luxury fans, and anything else that extinguishes fires (did rain affect it too? I forget). It's a MAGIC light, it only makes sense that something which uses fuel that is also magical (i.e. not combustible), should be unaffected by these things. (The coding certainly exists now in ANR)
Second, and I think this would really cement its sunk cost and viability, is to also make it unaffected by shadow hands. Lorewise it would be debatable how they would actually treat this, but it would have so much more value to most players if they could just throw some nightmare fuel in, and forget about them while they work in the light provided don't you think?
An optional third change would be to allow things like Night Swords & Armor to be allowed to be used as fuel similar to how grass / log suits can be thrown in regular campfires. We've all seen those items just sitting around in a world with next to no durability left at some point, making this another use for those who don't bother to actually finish consuming it just seems like a "Why not?" thing to do.
Alternatively, and the following thought is a rework mind you - would be to treat this like a cross between a stationary lantern and the long lamented removed Maxwell Lights of adventure mode days. Fill it up with fuel and it will activate whenever someone walks near it, draining slowly not unlike an ice flingomatic, except turning off when nobody is near, or when someone deactivates it. This option would be spectacular for Lights Out mode to replace this missing staple which was very multiplayer friendly for admins / hosts who spawned these in to allow newly joined players to get a quick grip on their surroundings without adding mods like "Starting items". Heck it could even become a new craftable in itself and a rare blueprint dropped by the Fuelweaver if so desired.
AND AS A QUICK ADDENDUM before I (digress) conclude and hope for some further discussion, I would also encourage people to look at the suggestion forum for what I'm calling Charlie Lights found here: http://forums.kleientertainment.com/topic/78069-charlie-lights/