I think one major cause of the problem is that every financial show/book/article for the last 20 years has been telling people that funds are a safe, smart thin

I think one major cause of the problem is that every financial show/book/article for the last 20 years has been telling people that funds are a safe, smart thing to invest in. And they have been, but they have been boring and have modest returns. It's not surprising that people are trying to get a better return. The solution is what it has always been "Let the buyer beware". If Madoff's customers hadn't skipped their due diligence, they would have been fine.