1) I don't consider patents on algorithms as a bad idea. Real inventions solving real problems should be patentable no matter if they are expressed as mechanics or software.
2) But patents on key parts in standards are really bad as they will give a menopoly beyond the invention itself.
The problem in the patent system are
1) Way too many lousy patents, not at all being new enough.
2) Functional patents describing function rather than method.
3) Way too high risk for litigation. Even if you win you have taken a lot of damage to your business meanwhile. The bar for litigation should be so high that only those obviously copying should be worried.
4) Only the esssential technology in a given product should be covered. If a mobile phone contains 250000 patents it is redicolous. Each patent must be strong enough to differentiate a whole product from another. A product should essentially not be covered by more than one patent!