"The problem results from too many people falling for this way of thinking"
And too many idiots thinking that stamps and signatures and certificates have magical powers and prevents the real ill-intentioned people from doing anything (we could say bureaucracy is the DRM for real life). Also people making use of their position as to gain personal power.
You have a point in saying that bureaucracy is not a bad thing per se, in both the original acception of the word and in some places, like in Germany it "mostly" works.
And btw, "bureaucracy" is not a bad thing per se! See: http://en.wikipedia.org/wiki/Bureaucracy
[edit: added link]