Sasha: We are talking about phenomena that reflect not just institutional
failure, but frequently great stupidity, greed or downright sociopathy
of individuals.
If we are looking at this issue through the lens of The Wire, we have to consider all the major failures in the show to be institutional in nature. That is the show's thesis. Whether you agree with that viewpoint or not isn't really relevant here; in the universe Simon has created, all examples of wasted lives ultimately result from institutional failures.
To me, one of the most attractive themes in The Wire is that, on a personal level, there really isn't a huge difference between a cop, or a teacher, or a stevedore, or a drug dealer, or a young black college student. We are all humans: almost always greedy, at times stupid, at times honorable, at times vulnerable. Sure, there are variations and shades here, but the underlying truth is that the desires and ideals that drive someone like Marlo are not all that different from those that drive McNulty or, for that matter, you or me.
The takeaway here is that a drug dealer doesn't decide to be a drug dealer because he is too stupid or greedy to want more from life. He is forced into that role by a confluence of circumstances too intricate to unravel: his upbringing, his education, his government, his economy, and yes, his personality.