All true, but I think a good measure of "brokenness" of a regulatory apparatus is the extent to which you need someone on the inside in order to understand what you need to do to get approval, as opposed to being able to find that information from easily discoverable documents as an outsider.
So yes, humans are fallible, but the extent of this reliance on "knowing the right people" is the extent of the fallibility.
Just like presidents should be decided by issues instead of how good looking they are. http://paulgraham.com/charisma.html
The other agents in all of our interactions are humans. Fallible, emotional creatures, guided by an unimaginably complicated, overlapping, self-contradicting set of heuristics optimized over millions of years to make us as effective as possible at creating more humans.
View any behavior approaching rationality as something to be treasured and appreciated, rather than the norm-- _Even within ourselves_. Even very smart people need prolonged introspection/mindfulness practice to become aware of how rarely we actually act as a rational being.
Wishing things were one way has no bearing on whether they are that way. We do ourselves a disfavor if we act as if the world worked the way we want it to rather than the way it does.