The only good thing about you experience is that, just lately China is seeing a lot more westerners coming to China to teach, because of the financial crisis. When so many foreigner go back home with such a sorry tale, hopefully this will force China to change working practices for overseas teachers. What is needed is a very big Top-Down change, not anybody seeking to change one school or agency at a time.

Agreed,and that's why China has so many FT's who are inept teachers.Chinese employers cannot pick and choose because many good FT's don't apply for jobs here!
As for what you say re contracts,I'd say that when joint ventures are set up,the Chinese partners are forced to tow the line by their foreign partners.Personally,I'm not prepared to put up with major breaches of contract either.I'll stick my neck out,take my dishonest employers on,get what I want,and then have to move on,after being deemed a troublemaker.That's ok,China is vast,and I want to see many parts of it.Having a Chinese wife is great insurance too - it gives me additional visa options to stay here between jobs.No,I'll not put up with being duped here.That would affect my own happiness,which comes first.I don't care about fitting in in a dishonest and class-conscious society.Neither do I care about my popularity.I'm a bit of a loner anyway!
As you say,the whole education system here is in need of overhaul,and that can only come from the top.When,if ever,that'll happen,I haven't a clue!