This is the crux of the problem.
"Foster Care", however, does not just mean "group homes" and "foster homes" with some stranger as a foster parent; it includes out of home placements with other family and relatives, and in various different sorts of arrangements. Some foster kids are prospective adoptees. Others are placed with family member is a "permanent guardianship" arrangement; this is usually when the parent has lost parental rights, but the prospective family member doesn't have a squeaky clean record. Still others are in "foster care" with a relative, or even with one of the parents themselves, while the parent(s) work to complete some sort of "case plan" that includes specific objectives to be met to reach the goal of reunification.
America's foster kids are, in the majority of cases, the offspring of parents with SERIOUS substance abuse and/or mental health issues. They are often in foster care because of neglect or abuse (including sexual abuse). They often have substance abuse or mental health issues of their own. If they are not going back with one or both of their parents, they often are placed with other family members, some of whom bear some responsibility for the condition the failed parent(s) were in, or who aren't, in reality, functioning at all that much higher a level that the failed parent(s) were.
It's fair to say that America doesn't know what to do here. America views these kids as throwaway kids, to be managed and not developed. The scope of this problem would be reduced if folks stopped having children out of wedlock, and particularly without any regard for what kind of life the child will have with what such parents are "offering" that child, but that's only one part of the problem; there are kids from two-parent marital families that end up in foster care due to abuse/neglect at the hands of one or both parents.