I think you're misguided. The criteria for patentability has never been bad, and has actually gotten worse since the recent change to "first to file".
Yes it has been, and your following paragraphs demonstrate clearly why this is so
The problem is it's impossible for anyone to know what can or cannot be patented without spending hundreds of thousands of dollars hiring an entire team of lawyers to search through the back catalogue of patents and inventions and court precedents.
The patent office does not have enough staff to do proper research while a patent is being filed. If they did proper research, they would only be able to approve a handful of patents per year with the number of employees currently working at the PTO.
The problem with the current system is that the PTO has taken the approach of only rejecting patents if they can find documented evidence that someone has done the exact same thing before. If there is a single independent claim for which they can't find exact prior art in a timely manner, then they approve the patent, regardless of how similar it is to other prior art. They deliberately ignore the obviousness of the patent because they don't want to have to defend subjective decisions against appeal.
The recent Supreme Court rulings have forcefully asserted that this is not acceptable. The law clearly states that obviousness is one of the criteria for patentability and therefore the USPTO and courts must take that into consideration when deciding patentability. Furthermore, they have stated that if the improvement that an invention makes on prior art is not patentable by itself, then the invention is not patentable. This is a huge decision because it rules out a ton of "on a computer" and business model patents that combined things that weren't patentable on their own into something that was patentable in aggregate. This second issue is likely to have an even bigger impact as it can be applied more objectively than the first which increases the chances that the USPTO will embrace it. Furthermore, if anything these changes decrease the amount of research the PTO has to perform for an average application.
It simply isn't possible for a small company to defend themselves at all, their only viable option is to settle out of court which inevitably means nobody actually knows whether or not the patent is valid. After years of watching this issue closely I have never seen a small company defend themselves in court. Some have tried, but every single one gives up and settles out of court half way through the process.
Agreed which is why we need these reforms. They proposed two important changes. First is to strictly limit how much information the plaintiff can subpoena during discover. This prevents fishing expeditions and prevents discovery from turning into a war of attrition, which will make defending oneself against patent claims faster and less expensive. Secondly it allows defendant to challenge the validity of the patent before discovery has taken place, potentially avoiding the vast majority of the expense of defending oneself, if the patent is determined to be invalid by the new post-Alice standards.
Personally I don't see how any reform could possibly fix the problem. There are certainly ways to improve the situation but I don't think anything can truly fix it. I've never seen anybody suggest a viable solution.
I have no disillusions that these changes will magically make the patent system perfect. In fact I expect the USPTO and the lower courts to continue to be slow to adopt them, but they address the two biggest issues with the patent system today - the low standards for patents and the cost of defending against them - which is more than I can say about any other proposed changes to the patent system in the last 50 years.