NATO demonstrated it was not "asleep" or "toothless" and the light damage to Yugoslav army equipment was intentional (the death of the Albanian human shields looked bad on TV). NATO had been waiting a long time to use their fancy new toys and prove they would work in a real war, albeit against a weak regime which posed no threat to member countries.
I don't think that the light damage to Yugoslav army was intentional, it's more like that NATO had tremendous difficulties to locate military targets in all those forests, hills, mountains and canyons. Balkans is not exactly a flat barren desert like Iraq where it's easy to detect, for example, a tank on 20 kilometers.
Truth is that after the first month of bombing, NATO realized that it cannot hurt Yugoslav army. It was still down there, invisible, mostly intact, and ready to fight. As the ground invasion was not an option due to expected high losses, decision was made to switch to what can be seen and destroyed - industry and civilian infrastructure, both of which suffered catastrophic damage in months to come. This was a blatant violation of the Geneva Convention and massive war crime, for which no one from NATO has ever been found guilty because, as we should all know by now, International law is dead corpse - if not sooner, NATO definitely killed it in Yugoslavia.