There's nothing wrong with the current mining model, except miners who for no rational reason flock to the biggest pool.
I won't try to justify their behavior because it is bad on the aggregate, but for the individual there is a rational reason to explain it.
Simply, the earnings are most predictable and smooth when mining on the biggest pool. And it makes sense to avoid the very small pools (those less than say 5%)
But as soon as the pool gets near 15-20% and provided you'll be mining for a few hours if not days straight, there is practically no advantage any more in looking for a bigger pool.
