Why is Customer Service so Terrible?

My experience and it seems that of many of my friends is that most Customer Services is rubbish. There are two things that are troubling. 1) You shouldn't need that much Customer Service if your organisation was running properly and 2) If you do have Customer Service, why is it not the basic remit of the rep to own and resolve the problem?
To be fair, some organisations are not bad. I have had no problems with Supermarkets but then I suppose most of that is handled in-store (never used their other services so don't know) but the worst by far are 1) Utility companies yes British Gas and BT are probably by far the worst 2) Mobile operators and 3) Some government departments.
Let us look at some figures that should make us shiver:
The Inland Revenue were slated for not answering more than 50% of the calls to their Customer Services line which might sound poor until you realise that we are talking about 40 million calls and 100 million letters per year! Definately a number 1) issue. Tax apparently does have to be taxing which is why everyone has to call. I used the line because of problems with the web site. When you are talking about millions of people, these things need to be 100% spot-on. There's no room for crytographic logging in screens and sloppy messy site layout.
Another one is a friend who has tried to sort out a basic cock-up by BT with 13 phone calls! Now let us consider the reality here, you are a call-centre operative and someone calls and says, "You have cut off my phone line, I have not received a bill, it needs to be re-connected". What would you think? I would think, "oh, that is so embarassing, we've obviously really mucked up. Give me your details and I will make sure you are not inconvenienced any further or I will call you back if I have questions". What actually happens? another 12 calls and NOTHING. Shame on you, you arrogant, imbecilic organisation. It is clear that you are not fit for purpose unless you are taking people's money. One of these would be embarassing but quite obviously it happens every single day, all the time. If you have a quality manager, they need to be empowered or publically hanged!
Carphone Warehouse, yes, you're next. 4 phone-calls about a non-received cheque and apparently despite the shamefulness of the incompetence, just more excuses and for some reason the inability to use first-class post or a BACs/DD transfer to give me the money. They are still harassing me for an unpaid contract and the next letter they get from me will be cease and desist followed by a County Court summons.
Britain used to be great but mostly I find it embarassing. Why is it like this? Don't know, maybe we have chased cheapness so much in our quest for money that people cannot invest in quality anymore. Maybe there are too many service organisations and not enough competent people to run them. My view? Vote with your feet, stick two fingers up at them, embarass them in public and maybe someone will work out how to provide a good service.
Virgin Media on the other hand - wonderful, efficient, friendly and generous. It is possible people so sort it out.