The system was sufficiently functional to nurture enough knowledge and enthusiasm in you that you were equipped to attend and thrive in a PhD program. On a societal level, I don't think academia's sorry state is much to worry about.

On a personal level, it's pretty terrible. If you do decide to leave academia, there are plenty of opportunities for smart, committed people. I bailed on a PhD program shortly after starting my dissertation, and having Ivy-league graduate work on my resume has opened a lot of doors.