Many of today's problems were yesterday's solutions. It's a common cycle for an improvement to come along, be implemented, show some new problems over time, and then need another improvement to address those problems.

Capitalism was an improvement over feudalism (Marx agrees with this!), but no one is advocating going back to feudalism. The argument is that the problems with capitalism are so large and capitalism itself is unable to address them. Hence the need for the next improvement: socialism.

police state where the leaders pretend that there’s a higher ideal

When the Bad Countries do this it's a damning indictment of their entire system; when the U.S. does it, it's just bad apples that can be reformed away.