Which is to say, I don't think you can approach this from a purely reductionist viewpoint. Yes, a given institution is limited to a degree by its inputs, but it's also the case that each component has the potential to make improvements, even if marginal.
What I completely missed, and what you alluded to by mentioning people in prison, with bad parents, and so on, is that the present generation of families also have inputs -- the systems that they went through (education, military, commerce, etc.) and their own parents. The issues we have today are partly the results of mistakes made by parents living a hundred, five hundred, even a thousand years ago.
It's a depressing thought when expressed that way, but on the bright side, if we do as well as we can given our limited inputs today, we at least give the next generation of parents, teachers and employers a chance to do better than we could possibly have done.