Where did the church soften the Gospel?

The one question that always haunts me more than any is a simple one, but with a complex answer. Where did the church soften the Gospel? I really do wonder this. I don't believe it is the world's fault that Jesus has become so hated everywhere. Instead, I believe it is the church's fault for this. Somewhere along the line, they made it less than the grace of Christ mentioned in the Gospels that saves a man, according to the Christian faith.
For one, the church tried for so long to rid themselves of their Jewish roots. This was a very foolish act, because so much of the New testament is understood because of that Jewish culture. Finally, in this century, some brilliant teachers have started researching Jewish history and coming closer to solving all of the mysteries of the first century.
Secondly, the church started placing human demands on something more than merrit. They started placing a merrit of earning grace instead of just letting grace be...well, grace! This was especially seen by the Catholic church in the middle ages, as only the priests had knowledge of the scriptures. After this, many new denominations kept the tradition of earning salvation.
Thirdly, the Church couldn't keep as just one church, but now it is hundreds, even thousands of denominations. There are so many factions that it seems obvious why so many people aren't wanting the church. If the people who say they have the answers to life can't even get an answer together or understand how to agree, why would an outsider want this?
Finally, people forgot that Jesus demanded that we must give up our LIVES! We aren't doing a great job of this as a church because everyone is off doing their own thing and they are keeping all their possessions and hoarding the rest. I don't know any group in America that spends more money than the Christian community. "I got a new CD." "I bought this new book on theology." "Where should we eat?" "I want a Playstation 3." "My mom and dad got me a new car!" I hear this as much out of Christians, if not more, than out of those who don't believe in Jesus. I have to ask so many, do you love Jesus, or are you just trying to get out of hell free and live like hell while on Earth? Do you really WANT Jesus, or do you just want the reward for the punishment HE PAID!!! I am not mad at non-believers at all for any of this. It's not your fault, it's us! It's the Church's fault! My Jesus would never be accepted at my church because his dirty complexion and blood dripping from his hands, feet and head might make a mess! The academic system is not to blame for the lack of faith in Christ these days. It's the church to blame, because we aren't showing love to any of you non-believers and I apologize! I want to put the lyrics to a Todd Agnew song on my blog now. If you follow Christ's teachings, please read this and really question your following?

Which Jesus do you follow?
Which Jesus do you serve?
If Ephesians says to imitate Christ
Then why do you look so much like the world?

Cause my Jesus bled and died
He spent His time with thieves and liars
He loved the poor and accosted the arrogant
So which one do you want to be?

Blessed are the poor in spirit
Or do we pray to be blessed with the wealth of this land
Blessed are they that hunger and thirst for righteousness
Or do we ache for another taste of this world of shifting sand

Cuz my Jesus bled and died for my sins
He spent His time with thieves and sluts and liars
He loved the poor and accosted the rich
So which one do you want to be?

Who is this that you follow
This picture of the American dream
If Jesus was here would you walk right by on the other side or fall down and worship at His holy feet

Pretty blue eyes and curly brown hair and a clear complexion
Is how you see Him as He dies for Your sins
But the Word says He was battered and scarred
Or did you miss that part
Sometimes I doubt we'd recognize Him

Cause my Jesus bled and died
He spent His time with thieves and the least of these
He loved the poor and accosted the comfortable
So which one do you want to be?

Cause my Jesus would never be accepted in my church
The blood and dirt on His feet would stain the carpet
But He reaches for the hurting and despised the proud I think He'd prefer Beale St. to the stained glass crowd
And I know that He can hear me if I cry out loud

I want to be like my Jesus!
I want to be like my Jesus!

Not a posterchild for American prosperity, but like my Jesus
You see I'm tired of living for success and popularity
I want to be like my Jesus but I'm not sure what that means to be like You Jesus
Cause You said to live like You, love like You but then You died for me
Can I be like You Jesus?
I want to be like my Jesus