Sean,
the fact that there aren't many handicap holders in the US is precisely not due to shortcomings of the USGA handicap system. There is simply no reason for these golfers to hold a handicap, because they don't play comps at home and they don't play abroad, where handicaps are required. The US is one of the few countries, where access is not regulated by handicap.
It is a valid thought that handicaps are meant for competitions, but this concept is undermined by the many clubs using handicaps for different purposes, i. e. for regulating access to their courses. Complain to these clubs for misuse of the handicap system, not to the golfers, who have no choice in the matter.
Jon,
I completely disagree with your "Joe Bloggs" statement that recreational golfers play only once or twice a year. The opposite is true for many golfers, who play regularly, but never/rarely in comps. I am a typical example for that. In my case for about 50 rounds of golf there is one comp round. Many years I haven't played any comps, but a lot of golf and much of it on courses that regulate access via handicap requirements.
The idea to base handicaps on competitions, but then require them for casual rounds defeats itself.
Ulrich