Our system is thin at the upper levels, but we have a lot of talent in the lower-mid levels. I'd hardly call it "bad". the Mets system right now ranks in the middle-to-lower upper half of teams.
I recall reading something from one of the Baseball America scouts or something about how after the Dickey trade, he'd rank the Mets system in the lower-upper half of teams.
We still have a lot of work to do on our system, but we are aren't bad. We are getting better.
I don't completely agree with your "why sign anyone" comment - at least not anyone major. But I do agree that the Nats, Braves, and Phils are a cut above, and so I don't see us finishing much better than 4th place regardless of who we sign at this point.