I don't completely disagree with you here, but I'm guessing you're younger than I am. Your philosophy of 'everyone who can work, should' is great when we have full employment - but in recessions and depressions, there simply are not jobs for all the people who want to work, or who should work. Those people are burning through the money they saved for a rainy day. And often, their joblessness has nothing whatsoever to do with their worth - they just happened to be working for the wrong company (one that either ceased to exist, or at least had to lay off large numbers of workers) at the wrong time (when unemployment rates are high, so competition for the very few openings there are is much greater than normal, and perhaps in the wrong place (we usually just hear about the national unemployment rate - often it's much higher in specific places - especially if the major employer in a region goes under).
Personally, I've been fortunate in my life - but I can still remember the early 80s when, even though the town I lived in had relatively low unemployment (compared to the national average), when a chain restaurant would open in town, they would get 300-400 applicants to show up on one day for a job fair. All of those people were competing for about 30-40 jobs (and we're talking pretty low wage jobs, too). It was a college town, and the jokes about taxi drivers with PhDs had essentially come true - the cab companies required at least a bachelor's degree for applicants.
Those are the reasons why we have a safety net like social security - you can absolutely be a solid worker who tries to save for your retirement, and be completely wiped out, close enough to retirement age that you can not possibly recover on your own. And if you're working at Wal-Mart, or some other similar wage job, good luck saving anything (especially with bank fees, since you won't have enough of a balance to avoid them) - most people at that wage level can't afford health insurance, so getting sick (or needing dental work, etc.) can easily wipe out anything they can manage to save.