Just thinking out loud....
Institutionalization of any given longing or goal is destined to corrupt the longing and goal for which the institution was created. You can take that to the bank. "Pure as the driven snow" as the goal may be, still, once institutionalized, the soot falls together with the silvered flakes.
In Zen Buddhism, for example, it is pretty much an institutional given that "there is an unbroken lineage" from the time of Gautama to the current setting in which that unbroken lineage is posited. For anyone willing to fact-check, this is a tortured bit of unreconstructed horse-pucky at best. (Check out Stuart Lachs who addresses the subject even if I am too lazy to dig out the specific citations just at the moment.)
I don't think it is unusual that institutionalization screws the pooch in any field of endeavor. The problems arise when anyone claims the institution does not, in fact, screw the pooch as regards the intended goal or solution or improvement. Just look at the buck and shuffle the Vatican has been reduced to of late as it tries to maintain an ascendant institutional position when its flaws (priest abuse, hierarchical autocracy, etc.) are put on parade. And "authentic" Buddhists are not hard to find.
I'd call it a sine qua non ... where there is an institution, it's time to be wary at least, assuming anyone takes the goal seriously.
But no one ever entered a sociable dining hall looking for a table-for-one. There is consolation and inspiration in company, so the impetus for institutionalization is very human and understandable. Let's eat together and inspire each other. Let's have an institution that will codify our social longings. I'd call this human.
OK, the goal may inspire some serious longing. The institution may provide a beckoning expression of intent. AND the institution is bound to screw the pooch. Those who think the institution cannot or would not screw the pooch lack sufficient experience ... or anyway that's my guess.
Devotees may yowl with anguish when they discover that their beloved has betrayed their love, that they have, in some sense, been had. But this is not to suggest the institution needs to be torn down. It is to suggest that whatever the institution, within or without, it is up to the devotee to find the truth within the lies. Supporting or criticizing the institution is not so much the point ... the point is that all formats have flaws (and some of them are damnable flaws indeed), but the truth that lay in the original longing is not to be denied. Does this mean another institution needs to be erected -- something more pure and noble and free from flaw? Maybe ... but all institutions, improved and otherwise, suffer from the same flaw. Those who, for example, claim a desire to return to the teachings of Jesus or Gautama have not yet returned far enough.
Just something to think about, I guess.