Or the category thing - yes, it has circular references which breaks the nice theory behind it, but what practical issues to the readers or editors does this present?
The syntax is messy, yes and it's a problem. But converting it to a markdown/HTML is downright absurd. I think the current approach of improving it step by step is the most reasonable. Wikipedia is a project which can afford to sustain its own custom syntax (because of history, compatibility concerns and wikipedia's special needs).
I think the biggest issue isn't technical in nature - it's the actual task of building the encyclopedia - to decide together on its scope, decide what is notable and what isn't. To fight against brigading from interest groups, fight against attempts to game their rules. All of these are intrinsically difficult tasks and of course wikipedia has made many mistakes. But even then it still fares pretty well in my book.