Education is not fine. If all students and parents valued education and put forth an honest effort then it might be. There's far too much money in administration without any visible improvement in results.
Schools have become social programs. After feeding, clothing and caring for children there isn't enough time and money left over to educate them. It is important that children in need receive these services, but the more roles the schools try to fill the less they can focus on education.
Funding is a huge issue. Schools seem to want/need more and more money while continually lowering their standards. Schools focus on getting all kids to meet minimum standards of achievement but don't do much to challenge all students to reach their potential.
When it comes to kids with special needs, or kids from less than optimum backgrounds, our schools are probably among the elite government schools in the world. However, when it comes to challenging the average kid and pushing him to his potential, our schools don't do so well. Well meaning programs such as "Leave No Child Behind" end up holding back the more capable kids while the others, for whatever reason, are coaxed into learning.
With hard work and motivation anything is possible.