The system was corrupt. The corruption came in letting organizations like the Federation have a seat in the Senate. That's like letting Apple or Mircosoft have a seat in either branch of congress. In turn, the Senate allowed the Federation to protect itself through the use of Battle Droids which could be mass produced for war, in short order. And the Jedi tolerated the system because to go further would to become like the Sith. That's why the Sith came about in the first place. They wanted to make things the way that they thought they should be and that was not right. The only thing that could be done was to do what was done, which was to have the people fight back against the threat. Which in turn is what the Alliance did. The people needed to fight for the people and the Jedi just needed to make sure that the Sith didn't start up again.