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Some people would argue that the Founders were wrong about this because of the fact that the courts can have a great deal of impact on the laws. They would point to things like the decisions in Brown v. Board of Education or Roe v. Wade to show that the courts can be very powerful.
Although these decisions were important, the judiciary truly is the least dangerous branch. It cannot proactively legislate in any area of law that it likes. It also cannot go too far outside what is believed by the mainstream of American society.
The judicial branch cannot legislate. Of course, it can change the law profoundly through its decisions. However, it can only change the laws in areas that come before it through court cases. This means, for example, that it would have a very hard time having any impact on taxes and spending.
The judicial branch cannot go outside the mainstream. This is because its decisions must be enforced by the executive branch. If the executive refuses to enforce these decisions (as in the case of President Andrew Jackson and Indian Removal) the courts can do nothing. If the courts hand down rulings that are too unpopular, they will simply be ignored and the general public will not punish the executive for ignoring them.
In these ways, the judiciary truly is the least dangerous branch.
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