Too true. People wail about how awful it is that NASA is getting less money, but really that's probably the best thing for the agency. I bet you they could still run manned space operations on a smaller budget, but first they'd have to get their stuff together.
Some anecdotal stories;
I have an uncle (I think...he's extended family, I only see him on Thanksgiving

) who contracts for NASA. He's one of the old guys that was there back in the 60s and 70s I think, he told me about back then, if they wanted a new satellite, they'd get it up and launched within six months to a year or something. It was a very active environment, it accepted risk and it was very much that attitude of "gotta get this done, we don't know how to do it exactly so we're going to do the best we can". They were getting a constant stream of well educated, well skilled employees coming to work at the organization.
Fast forward to now, and things have changed. Firstly, it takes forever to get anything done. Through a myriad of deals with companies, outsourcing to private firms, litigation-happy lawyers, and a constant need to "justify" it's existence, what used to take one year now may take 5 or 7. It's more expensive because of yes, the bureaucratic bloat - there is so much paperwork that goes with launches now, it's unbelievable. As an example of how messed up the contracting system is (both for NASA and in general). NASA contracted out to rebuild a bathroom in one of their buildings. Halfway through the project they discovered that something was wrong with the plans and one of the stalls was too small for regulations.
However, the way government contracts work, they
could not stop building it. They HAD to finish the bathroom because that was what was specified in the contract. After the bathroom was finished, they had to draft a
new contract (it costs money to make these contracts, too, don't forget), to tear
down the bathroom they had just built, and then rebuild it up to spec.
As for the highly educated, highly skilled workforce - this guy retired several years ago, but they keep bringing him back because he's one of the few people that know how to do any of the stuff he does (he works with space-hardened electronics). The engineering students that are coming out of universities look great on paper, but when it comes to practical experience and knowledge they have
not a clue. We got onto this subject because I brought up how
bad a majority of the engineering students I've met are at what they do. It's crazy. They know how to crunch numbers like "all good engineers" - but they have no clue how to think creatively or problem solve.
But I don't need to go into the failings of the US education system and the hilarious yet depressing failings of it's college/university system. That's pretty obvious to anyone who enjoys knowledge or learning, and it's a discussion for another thread.
The point is that NASA is a very useful, very necessary government agency; but it really, really needs to stop acting like one. Most government agencies today are these massive entities that are separate bureaucratic monsters that the general populace feels completely disconnected with. These budget cuts could be good for NASA, if they get a clue. They need to streamline, and take this massive pillar of bloated government "achievements", and flatten it so that people can actually interact with it. They need look back on themselves honestly - they should really have a public discussion where they ask people "Do you think the shuttle was a success?". Of course they get to discuss their side of the story, and have this real healing process that looks at the pros and cons of what the organization has done in the last several years. There's been a lot of good decisions and a lot of bad ones, and they need to hold themselves
accountable for what was done, otherwise we really won't learn what works and what doesn't in a public space program.