Putting children in care is seen as making life better for badly treated children. There is debate about this issue. A child living on a quasi temporary basis in an institution or foster family situation certainly grows up with a "skewed" outlook on life. Their upbringing is not "normal". And they know it.
Saying there are multiple issues at home is really a cop out by the government. It doesn't explain why the problem exists nor offer a satisfactory solution. Holding that reuniting them with their families is too much work sounds very much like the department has given up. The desire to be with their families is strong even when they are young adults.
Foster care has always been a second-best cure. Children move from family to family and never trully fit in. They feel isolated and this isolation continues into adulthood. A problem that is never examined is that a child from a family with poor parenting skills grows up to be a bad parent also.