IMAC, we are here in the United States to observe, to understand American democracy, not to judge it. I think American people are serious and sincere about democracy and freedom, although they know this system is not perfect. I would prefer not say they are just hypercritical.
Democracy makes the masses feel good, even powerful. This reason is enough. It's like weeds. Once you get used to it, you will not need anything else. You tell people efficiency is also imporatant, people will go "hell no, i know it's good, but I like being poor as long as others are also poor!!!" Sometimes if you really believe in one thing (like religion), anything, sooner or later, all your belief system will be reorientated according to this faith. And you will feel good, even powerful.
The best thing about this system is the sense of security. You get due process if you are charged with crime accusation. Yes, OJ Simpson can take advantage of it so what? No many people have been executed for the crime they never committed. And a retarded student can get in a regular school rather than being institutionalized into a special school. Yes, you can argue it's not efficent educational system, but American people like this idea and they fighted for it for decades. And a ESL elementary student can get an interpreter in his/her classroom. Yes, too expensive ha? but from the long run, these disadvantaged groups can better take part in American society, both politically and economically.
With all that said, I have to make it clear: I do admire American democracy, but I don't think we should copy it to China right now. And I still think a strong domestic democracy has to be based on a certain kind of oversea slavery (globalization). The weakness of lacking efficiency in a democracy can be made up by exploiting other nations as long as you make the rules for international society and has a very visible military existence all around the world. Most of us admire the freedom and wealth American people are enjoying, at same time, criticize its aggressive foreign policy.
Can China make it? Definitely not. The first priority for CCP is still to buy a little time, to survive. So what you said is pretty reasonable. However, with time going, China should improve its human right situation and empower people with more freedom. To do it, the first thing is China has to be an independent power in international society and not at beck and call of another super power. The sovereign is important. For me, I would like to see people are comfortable with programs like SNL and South Park. When I walk on the street, no legal enforcement officials can beat or arrest me. When I buy a house, I don't need to fear one day some powerful real estate company taking my property at their will. I want to be safe. That's it.