They're not run by idots, they are run by people who are given pretty strict rules on what they can and can not buy. too many people were given too much freedom and the back-lash is that these guys have been given pretty detailed guidance in what can and can not be bought.
From my understanding, the only people that have free reign within the bigger institutions are the guys doing prop trading - i.e. using the institutions OWN money, not that of its customers.
Would happily stand corrected if someone could tell me otherwise.