I love this question and I appreciate your forwardness and honesty in asking it.
The problem with "lazy, complacent, and dull-minded people" just being left to their own devices is that we assume that they are also kind and want for little. But then there's strain (http://en.wikipedia.org/wiki/Strain_theory_%28sociology%29).
Strain theory suggest (rather aptly) that people who want (or feel they deserve) more than to what they have legitimate access will find illegitimate means to obtain their wants. When you have a nation full of people who are trained from day one to consume more and more and to seek out luxury, but are not given the necessary requirements to *earn* that luxury through appropriate means, they will (and do) turn to crime.
Your standard education curriculum seeks to change both the goals and the means to achieve those goals by teaching that you don't need a life of luxury to be happy (via ethics, philosophy, history, literature, etc.) and to provide the usable life and career skills to not need to turn to crime.
In short, we can't just let the happily uneducated stay uneducated because they will not be able to contribute enough to their own well-being via legitimate means and will thus ruin it further for us all.
To speak to another point you make ("We're wasting valuable resources trying to keep mediocre people from entirely failing..."), I don't think we're allocating *enough* resources. But I'm not talking about raw cash, electronics, or amazing new buildings. The most important and long lasting investment you can make in beneficially affect low-performing students is to have a fantastic person in front of the classroom.
In California, there are thousands and thousands of these fantastic educators dying to get into the classrooms, but the state and districts are either severely underfunded or the money isn't being spent as well as it should. Moreover, the cost of becoming a teacher is insane. Let's just take a look at someone who, in high school, seeks to become a great teacher:
(1) Do well in school.
(2) Apply to 4-year universities. ($45/application. Assume 6 schools.)
(3) Graduate from 4-year university ($120,000)
(4) Take GRE ($185), CBEST ($40), CSET ($140)
(5) Apply to Masters/Credential Programs ($60/application. Assume 4 programs)
(6) Graduate from MS/Cred program ($40,000), Receive Preliminary Credential.
(7) Apply to school districts/schools. Wait. Wait more. Travel expenses for interviews ($?)
(8) Get hired, non-tenure track, work for 3 years on-and-off depending on June-Layoffs
(9) Enroll in Professional Teacher Instruction Program, take more classes over a year. ($50 application fee, variable tuition)
(10) Complete "Clear" Credential from PTIP.
So... if someone wants to become the teacher that low-income, low-hope students need, s/he would have to spend/in-debt over $200,000 for investing in the *right* to make that change. When your average teacher in California gets paid $35,000/year for the first few years and slowly trudge up to $45,000 without job security, without pension security, and with a for-profit industry doing everything it can to reduce the amount of respect that a teacher receives, it's a pretty hard sell.
I know this stuff because I got to step (5), completely willing to accept the rest with a smile on my face. But then the recession hit and I just couldn't drag my partner through the rest of the steps without any realistic expectation of stability. I took an offer to pursue a secondary passion and am making more than a 10-year veteran teacher would be making after only 2 years on the job.