Why are so many people willing to throw away the baby (capitalism) with the dirty bathwater (monopolies and others crony deviations.)
That isn't capitalism, you just described a market. Markets existed for thousands of years before capitalism was created.
Or in software terms, I think our current form of capitalism is in need of refactoring, not rejecting as fundamentally broken.
Because it's important to differentiate markets from capitalism! Otherwise feudalism would have been capitalism, too.
Monopolies run against the spirit of capitalism. Regulated markets on the other hand are fine as long as competition is ensured.
That existed before capitalism - in feudalism, for example. It's true in the context of Marxist analysis of capitalism as that's how Marx decided to frame capitalism, but it isn't capitalism's distinguishing feature.
> Monopolies run against the spirit of capitalism.
Effectively, yes, which is why we should prevent them by either public ownership of natural monopoly resources (public road ownership, for an example to wind up the libertarians) or regulation.