Do We Get the Government We Deserve?

WARNING: Another long post ahead!
I got a question from a relative that I've also wondered about for a while:

Are the people ultimately responsible for bad government policies? The people elect the government officials or give way to small interest groups by not voting, but the government officials often get elected on false promises and demagoguery. Are the people to blame for being ignorant and believing the demagoguery? What is a better way to obtain the voice of the people if voting doesn't work? Do electoral colleges in theory vote for what the people really want regardless of how they vote?

This is a question I've struggled with for years. On my more cynical days, I tend to think ignorant voters are responsible for bad government, and that all politics is a beauty contest. But, on my more thoughtful days, I think there are several things to consider.
First, I think local and state elected officials better reflect the views of their constituents than federal officials do (usually). You've heard the saying "all politics is local." Well, this used to be literally true. Really until the 20th century, the individual had almost no contact with the federal government. Issues from taxes to schools to roads were all local issues. People are much better able to be educated on local issues than national ones simply because they are better acquainted with the areas and people involved. Demagoguery is less apt to succeed, and false promises are more swiftly punished at the local level. But the modern federal bureaucracy has expanded so much that it intrudes more and more into areas that used to be the province of local government (e.g. No Child Left Behind, Interstate Highways, Medicare and Medicaid, Income Taxes). The federal government has so many more voices clamoring for attention that it will seem unresponsive to almost everyone. The media coverage of issues makes this worse. Federal elections and issues get a disproportionate share of coverage and analysis.
Second, this problem is compounded by the fact that Congress has delegated much policy-making authority to agencies, and exercises little oversight. Courts, too, regularly defer to agency judgments. So policies are set by agencies rather than elected officials. Congress likes it that way because they don't have to take responsibility for controversial policies. They can blame the "current administration" that chooses the agency heads. Agencies take on a life of their own and their inherent inertia and resistance to change means that they far outlast any presidential administration, and almost any national outcry for change. (you could call this the 1st Law of Government Dynamics: an agency once created can never be destroyed, only converted into another agency).
Third, the two-party system restricts the range of possible actions on any issue to basically two: the Republican party line, and the Democrat party line. Any widespread public desire for government action is taken up by a political party and filtered through the lens of their platform. On the other hand, issues that don't agitate a sufficient number of people tend not to be championed by either party, and thus never come up for debate in Federal elections.
Fourth, we are a victim of our freedom. People don't get too worked up about things that don't directly affect them; and despite all our complaints, most of us just aren't that affected by government. We go about our lives without any direct consequences for voting liars and demagogues into office. (see my sixth point about having a "stake" in the outcome). We vote for the one who says all the right things, then don't bother to hold them to it because we don't feel the effects of the lie. Someone wise once said something to the effect of "limitations on freedom are more readily accepted in big things than in little ones." As long as the government doesn't interfere with our little everyday things, we don't get too worked up over it. We get worked up over taxes, for example, because we pay them all the time. Hence the tax code is revised every year, sometimes substantially. This, in part, is why the Soviet Union fell. It tried to control too many little things. This also may be why China's Communists have survived. People can make small decisions with relative freedom, and TVs and Gameboys are available. A little repression of dissidents doesn't bother anyone too much. The Scriptural warning about "flaxen cords" comes to mind.
Fifth, people really don't care. Most people don't understand the hot-button issues, and don't care that they don't know. The only time most people see and hear presidential candidates is in (scripted) televised debates, the nightly news, or MTV's rock the vote. All that sticks is the 4 word sound-bite message. Most people see even less of Senate and House candidates, and nothing at all about state legislative races beyond the (R) or (D) after the name. Being a political wonk takes time and effort. Few of us have the time or interest to become specialists, (and even fewer are touched in the head enough to enjoy it as I am).
Sixth, and this is going to be politically incorrect to say, but the expansion of the vote has made voter apathy worse. Originally the vote was limited to white male land owners. They were seen as the ones who had a stake in the decisions the government made. They stood to lose property, and were thus more motivated to study and debate the issues. By expansion, I don't mean giving the vote to women and blacks, there's nothing wrong with that, I mean giving the vote to those who have no "stake" in the outcome. Now that everyone over 18 can vote, many people simply have nothing at stake. The one who wins won't affect them in any way. Even worse, candidates can now promise to give money out if they are elected, whether you are talking about tax rebates or welfare benefits, it is all just a matter of giving people a stake in the election that they wouldn't otherwise have, and a reason to vote for candidate X. So, for many people, the decision boils down to "None of this will affect me, but candidate X will give me $500, so I might as well vote for him."
In summary, voter apathy is partly to blame, but I think the structure of our system is a big factor, particularly the waning of states' rights and the rise of our current massive federal bureaucracy. People just can't keep track of all issues, and naturally they tend to react to local issues, or national issues that impact them personally such as taxes, marriage, etc.
As to what is a better way? Who knows. As stated in my post on the electoral college, our system originally was attuned to the voice of the people on the state level. Federal bodies were not directly elected, with the exception of the House of Representatives. This allowed people to focus on issues on the state level where government is more responsive. The state then relayed the voice of the the people to the federal Congress and the President who never directly regulated individuals. The state officials then were accountable to the voters of the state. Currently the House and Senate are both directly elected, and the Presidential electors are tied into the two-party system, so the state government really has little to say on the federal level. Your state government can perfectly reflect your views, and be very responsive, but can't influence who holds federal office.