I did my undergraduate degree in philosophy and psychology. I decided that psychology was not for me (or, more exactly, working in group made me realize how little patience I had with people who had easily solveable problems that they were reluctant to solve for one neurotic reason or another), but it was an excellent education in the foibles and nature of my fellow humans. I did some clinical work at a local institution learning how to classify, how to identify patients that could be helped and those who could not, as well as meeting some truly evil individuals (nightmares back then about those folks) that underscored the need for institutionalization.
This prodded me to recall some of the topics discussed back then.
Fundamentally, there was a shift, driven in no small part by the film "One Flew Over The Cuckoo's Nest" in terms of general consciousness-raising amongst the population, from institutionalization to non-institutionalization.
Back in the day, there were abuses of the system. Borderline (not syndrome, but actual borderline) cases where someone could have lived in society, but parents and others responsible didn't want to be bothered (and yes, there was often money involved, usually a sizable inheritance) and hence someone who simply needed some therapy (to overcome deliberately induced feelings of worthlessness and self-disgust) and normal, non-destructive relationships to become a functioning and, dare say, even happy member of society would often be institutionalized and end up vastly worse-off than before.
But the solution was and is devastating,driven by do-gooders who wanted to correct "horrible wrongs" and ended up inflicting misery and more often than not outright horror and death by removing as many from institutionalization as possible.
The goal wasn't only to "liberate" those who were, in many cases, clinically insane, but also to confront society with its debris, with those who failed to make the grade, to rub society's nose in the dirt, so to speak, because capitalism was so horrible and anyone who didn't want to live the capitalist dream was oppressed and downcast. The institutionalized were viewed as victims of a ruthless and brutal society who did not want to deal with their problems, which needed to have half-way houses placed in the best neighborhoods in order to remind the successful of the societal costs of capitalism.
Yes, I am being serious about this. This is virtually verbatim from one activist psychologist working with one of the deinstitutionalization advocacy groups of the day.
There was a method to the madness: throw the institutionalized out in order to generate budgets for half-way houses, employing those who proclaimed the need to integrate these people into society. The idea was that a generation of advocates could live off the state this way, while at the same time confronting American capitalist society with the costs of capitalism, mental illness of those who were too frail to withstand the rigors of that society. Half-way houses were considered optimal, situated with plenty of room, plenty of space, in upscale neighborhoods to force the rich to see what costs their success required. Half-way houses would let the institutionalized, taking their medications, to reintegrate with society and ultimately help change society so that their "different" ways of perception and behavior would become acceptable.
The reality, of course, was that the advocates, as did most people, found the institutionalized to be extremely difficult to get along with, that they would conveniently forget to take their medications, that putting a half-way house near a school would only infuriate the parents and that the half-way houses would end up in the worst possible neighborhoods because they were powerless to fight them. The reality was that institutionalization was actually necessary in many cases - I remember the statistic of over 90% - in order to prevent, for instance, a severely neurotic young man who masturbated constantly from doing so in the local playground.
It was, as is so often the case, a massive failure. But the activists based their careers on it, the institutions were closed down, the institutionalized became homeless and lived lives of despair in a mental fog.
The best intentions. The worst possible results.