To get beyond the question of "why?" (a valid question), here are some ideas on how.
1. You MUST have a local presence...that doesn't mean that you have to have local programming 24/7, but you need to have at least one local station voice that is regularly talking about what is going on in Dover and Kent Co, updating weather, news, traffic, etc. and incorporating these local elements into the syndicated automation.
2. Provide programming that has value to the community. You can't be a jukebox since people have so many choices for listening to music, so you have to provide programming that has value to certain segments of the population like shows that cater to seniors, outdoorsmen, investors, home buyers, etc.
3. Targeting advertisers with your programming. By providing programming that has value to the community, you also have the ability to target programming to sell to potential advertisers...for instance retirement communities (seniors), hunting equipment (outdoorsmen), financial planners (investors), real estate agencies (home buyers), etc. A small AM is not selling ratings or even selling audience, but is selling programming and information. You emphasize a cross promotional approach that means the station promotes the client and the client promotes the show.
4. Use the resources in your community. There's no need to hire radio professionals to host or participate in the programming, instead use professionals in the community that can apply their expertise on the programming you offer. In fact, get the right glib professional (with a bit of in house training) and they will be able to volunteer their time on the air as a way to cross promote their business or career. Some will even pay for the airtime and provide their own sponsorship.
5. Offer listeners something they can't get elsewhere. Instead of plugging in politically oriented talkers, use syndicated hosts that can offer a broader entertainment based slant (Dennis Miller) or a more specialized lifestyle slant (Dave Ramsey) or use service based shows like The Money Pit, Car Talk, etc. to round out the schedule.
6. Have a major web presence. Offer 24/7 streaming (even if you're replaying local programming to catch people in different dayparts), podcasts, local news and sports stories, advertiser links, blogs, Facebook, Twitter, Youtube, etc. Strive to be the community's online news and information media source.
7. Have LOTS of guests. At any opportunities have mayors, town council members, county executives, state representatives, business owners, community activists, service providers, professionals, religious leaders, artists, musicians, craftspeople, etc. talking about the economic activity or issues in the city and county. Also, have a diverse pool of guests of all political, social, and racial stripes.
8. Get kids on the air. Have kids on the air promoting school activities or programs like the arts, sports, or Character Counts. Cover the high school sports teams if you can.
9. Visibility. Show up at community events, be in the parades, drive your station vehicle around town, participate in the Chamber of Commerce or Main Street committees, etc.
10. Work your tail off.
Doing all of this certainly doesn't guarantee success, but if you're going to make a small AM relevant you have to make it a labor of love and really work it. You simply can't turn on the transmitter and expect to get listeners or advertisers.
I do think there is an opportunity for Dover, especially since the big "Dover" stations are based out of Wilmington now. Realize that a small AM isn't competing against other radio stations heard in Dover, but is competing against print and online media.