It's a complex problem, there really is not much needed at the federal level as far as policy making - it's a bloated bureaucracy, and the politicians want to keep their cushy jobs, and so they grapple issues as long as possible to make the appearance of their need to be.
"Institutional Paralysis" is an interesting concept, and I agree with your reasoning. What you are realizing is the same situation as what caused the 17 Amendment to the federal constitution. Way back when, the Senate was elected by the state legislatures, but the states were muddled in institutional paralysis and nobody understood what was the original cause and/or the proper solution. People inappropriately declared that the legislators were corrupt and therefor prevented the people's proper representation at the federal level, and so the Amendment gave the election of US Senators to that of the people, as we have now. And so what has happened is that the problems of the states has been elevated into the federal system as you are recognizing, culminating in institutional paralysis.
The problem of the state legislatures failing to fill the federal senate was a good thing, because it prevented the inept ideologies that were "clogging" the states legislatures from entering into the negotiations of federal level policy making.
The original cause of the problem is that the states were/are plural-secular - all kinds of people with all kinds of ideas (religions, philosophies, world views) are supposed to be somehow represented and entered into the negotiations of policy, and it just does not work. Ideologies have to be somewhat segregated, so as to allow them to work to their full extensions of logic in social organization - you cannot play basketball on a baseball field with football players.
Consider the Democrat versus Republican situation - why can't the Republicans be allowed to prove that their way is correct, why must it be tempered by Democrat ways, and visa-versa? If there is a happy medium, why hasn't anyone figured what that is, and let's do that???