Employing a second medium of sound volume resistance?
There is actually a somewhat hidden step between 1/4 bars and muted. To select it, first set the volume to zero by holding the volume down key and then press the mute key.

Another way is to run osascript -e 'set volume output volume 0.5'. set volume output volume 0.1 and set volume output volume 0.9 are equivalent to set volume output volume 0.5.

You can decrease the volume level by using Soundflower together with AU Lab:


Download Soundflower from http://cycling74.com/soundflower-landing-page/ and download AU Lab from https://developer.apple.com/downloads/.
Select Soundflower (2ch) from System Preferences > Sound > Output.
Open AU Lab, set the input device to Soundflower (2ch), set the output device to Built-in Output, and press Create Document. You can then control the volume level from AU Lab and by changing the volume level of the built-in output from System Preferences.