Professor J, 
As we continue our discussion I cannot help being reminded of our friend, Gibbon frequently. How clearly he would recognize much of it!
You chastise Beck for immediately blaming government while you appear  to do much the same thing with corporations when in both cases these  are merely organizations of one sort and another made up of people, I'm  wont to hold individuals responsible no matter what collective they are  hiding in. As you have said the elites from both these groups run in the  same circles (and protect and cover for each other) but I have trouble  holding the corporations any more responsible than the government.  Corporations are at least honest about the purpose for their existence. If they don't do all we would have them do in terms of fair  wages, community support, or environmental responsibility, are they breaking a  sacred trust? They haven't in the past taken an oath promising to do anything, although this idea is being proposed more and more often. They may be  breaking a trust with shareholders and investors, when they engage in  corruption and graft, but not necessarily society technically (though  all of us are operating under the kind of social trust that holds  civilization together), certainly we would have them behave better for  all our sakes. On the other hand our government when it fails to do what  our defining documents outline, is. However the corporations may  influence with money and  promises of posh jobs post public service,  those legislators write the law that allows the shadowy behavior and  graft that we see.
We might hold yet a third group complicit in all of this. THE PRESS.  Edward R. Murrow said,  "No one can terrorize a whole nation, unless we are all his accomplices." I love the old movie image of the surly reporter, doggedly trailing the truth in his rumpled suit. Where has he gone? The press might have served as the proverbial beacon of light exposing much of the corruption festering in the unchecked darkness, except that here probably more than anywhere I agree with you that the corporations are running the show. And a "show" it is, we can barely call any of it news at this point. This is a discussion all its own that I'm sure we'll get to later but here are some links that the reader may find enlightening in the meantime:
FAIR's listing of interlocking directorates, 
Media Reform Information Center 
Who Owns What
The conferring of dignity on  corporations by treating them as "persons" with free speech rights was  put in place and more recently upheld and expanded by who? The Supreme  Court, which is supposedly above the influence of money and hope of some  better job later on, members being appointed for life. If one disagrees  with the court, then who failed to protect society from the "corporate  masters" gaining even more power? The judicial branch of government,  those individuals. 
While it may be true that the founders "saw far, but they could  not foresee the rise of these artificial entities called corporations"  they had certainly seen things which were in some ways comparable.  Couldn't we say that the new "corporate masters" you reference are just  running an updated feudal system? The permeating effects and  globalization of it they could not have imagined, but the concept seems  very old indeed and one, the degradation of which, the framers would  have been familiar with from their thorough reading of history.
I like your proposed alternative to term limits. I  think the idea of having a certain percentage of the votes for the  incumbent being "discarded" however might not be the best way of framing  it for an electorate where so few people participate in the process  and those that do already have real questions as to whether or not their  votes count and how much. I would rather see the office holder required  to win by a certain percentage of the vote, perhaps at least 10% for  his second term, 20% for the third, and so on up to a reasonable point.  The result would be the same in that eventually he would really have to  have great support to stay in office. 
Gerrymandering:  Would that we had gone with Jefferson's ward idea which Beck outlines on  p. 54. "Jefferson understood the importance of bringing communities  together in the political process." I found something beautiful  (in  what he imagined) and sad (in what we have) in TJ's quote, "every  citizen can attend when called on and act in person. Ascribe to them the  government of their wards in all things relating to themselves  exclusively."
What would he make of last spring's voter turnout in my county of 10% for a local primary? 
WE THE PEOPLE are ultimately to blame, as you say, for being remiss in our duties as citizens in all these things.
We might have been better off leaning a bit more toward the Greek model in some ways, including requiring military service in order to secure the right to vote or before heading to college as the Israelis do. Much of what you outline as problems with defense might be alleviated if the overall population had a better understanding of how it operates.  A society with a military made up of EVERYONE'S children might be a bit more careful as to where and when we think force necessary. 
Yes,  Obama is hard hitting about poverty and the inner city. He has the  luxury of being able to say those things and being listened to by those  most affected because of his background. Although I would say only to a  point, as Bill Cosby found out. Something within the culture it seems  draws a line at the truth it is willing to hear publicly regardless of  how much those involved might privately agree with it. So I do give him  credit for pointing out how parents and communities are at least  somewhat culpable in the problems.
Paine's  point (verified by your  Madison and Adams  quotes, not to mention the ten o'clock news), means the  broader question may  then be-- how to instill (or REinstill) character  in a culture  becoming more parched for it by the day? Didn't the Greeks tie morality (the universal kind) to personal liberty from the start? Gibbon references it again and again as key to the downfall of Rome.  Where does that leave us? 
I couldn't find where he mentioned being responsible  for welfare reform either, but it turns out to be some "ambient"  information floating around in my brain from campaign speeches and ads.  One of the fact checking sites  Politifact, deemed it a "half truth."
Do you hear that creaking sound (again)? It is a certain housewife's brain. ;)
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