Microsoft’s XSD.exe is often used for creating DTO classes from an XSD.

The program has its opinions and it is a bit dated.

What is needed is a new implementation that not only returns a more modern output but that also is adaptable for personal quirks.

There are more people that needs this.
https://stackoverflow.com/questions/386155/comparison-of-xsd-code-generators

There are alternatives already.
One (that I have not tried) is Xsd2code (that lives on Codeplex that is soon shutdown, so if you need it, grab it (and move to e.g. github). Remember though that it is dual license.)

There is also the alternative to manipulate the output of xsd.exe.
I found a, by me untried, example at Codeplex called XsdTidy.