Hi, I'm a patent examiner. I won't apologize for the agency, we have more than our share of problems, but I also think we get more than our share of criticism for bad patents.
The PTO simply has no ability to change patent law. We apply it as it's written by Congress and interpreted by the courts. A few points on the law without getting into criticism of the agency (you can get easily find that elsewhere):
1. The burden on patent applicants is too low. There's a presumption that a patent will issue as soon as it's filed. The patent examiner has to prove that whatever is claimed was obvious, didn't work, wouldn't work, etc. If the patent examiner can't meet that burden, the patent issues. The patent applicant doesn't have to tell us about the state of the art prior to the "invention", what the improvement is, or why it deserves a patent.
2. As discussed upthread, the obviousness standards are too low. If you can't find evidence that each and every aspect of a claim was in the prior art, you have to allow the patent. Even then, a patent attorney can attack the rejection if the different prior art documents wouldn't fit well together. As an examiner, you can't simply say that something would have been obvious, with no supporting evidence. If you try to make such a rejection, the patent attorney will appeal your rejection, you'll get reversed on appeal and the patent will issue anyway.
3. The process naturally skews towards patent applicants. Most (nearly all) patent applicants have an attorney who is fighting 100% for as broad a patent as possible. The examiner is supposed to be a neutral arbiter who applies the law in an evenhanded fashion. There's no party fighting for the public, pushing back hard against the patent attorney. It's like a courtroom where only one side of the story is presented.
You can find a lot commentary/criticsm of the patent examination process online BTW, but not generally on the tech sites - look more towards legal/academic literature.
(Speaking on my own behalf, not the agency's)