The Retributive Workplace, or WHY do I still work here?

So, I had this very interesting conversation with my big boss. I (of course) questioned some inappropriate behavior on the part of some middle management folks. What I consider the using a hammer rather than a flyswatter approach, and got his rather specious explanation.
It seems, since we in gubbmint are under so much scrutiny, what with all the public disclosure requests and such, we are going to see more "definitive" approaches to direction. Rather than get a warning or a discussion about what is needed, there will be more written reprimands and performance improvement plans issued.

Evidently we are so afraid of what happens when a few really bad managers/directors make the news we are going to over react so that we can document that our butts are covered. We can't seem to get rid of a management team that is openly passing dirty pictures around on office email until they are outed for such egregious behaviour in public that the local papers bring it up in every article, related or not, but we can now punish people for minor infractions so it looks like we really took care of business.

I, of course, find this approach not only antithetical to all of our supervisory trainings, but unprofessional and unethical. If we are going to go ballistic for minor things, where is there room for progression if major problems occur? Where is the respect and assumption of professionalism? We are working in an atmosphere of nerves and suspicion. An increasingly hostile and retributive environment that batters staff morale and grievously affects production.
I have been attempting to counter this pervasive mentality with an affirmative outlook, but I find myself increasingly feeling depressed and helpless.
Is this everywhere? Is this the new professional workplace?