Listen, we're both techies, and we tend to distrust "philazawfigal" arguments (nod to Richard Feynmann) because they are hard, if not impossible to prove experimentally or empirically. Economics is one of those "sciences" which evades verification because it is impossible to set up an experimentum crucis to determine its validity: there are too many variables.

Marx made two colossal errors. One, he assumed that nineteenth century capitalism (satanic mills, robber barons, slavery, European colonialism, etc) was the only possible form of capitalism and that it was incapable of reform. Two, after analyzing capitalism as he knew it, he decided to invent this preposterous fantasy of Communism to replace it it: an economic and organizational system that had never been attempted before and was never implemented in his lifetime. And where you are absolutely correct is that where it was implemented it was a disaster, not just because it didn't work, but because it led to absolute tyranny as unscrupulous rulers tried to force a system which paid little attention to reality on populations which instinctively rejected it.

But consider that by your own admission, you have not seen yet a historical example of the kind of economic system that you propose, a system where people "completely own what they produce". That some leader always manages to rip it off. You have no idea how much that rhetoric echoes Marxist theory! Marx was not so much interested in re-distributing property as he was in democratizing the means of production. In his opinion, it was the means of production which was being ripped off, accumulated and expropriated by the leaders. Capitalism was robbing the workers of the freedom to work for themselves.

To a priori reject all Marxist thought is equivalent to dismissing Adam Smith or David Ricardo because early 19th century industrial capitalism was a brutal sweatshop designed to squeeze every drop of labor out of a captive population of workers who had no other alternative. But these thinkers provide the philosophical basis for modern capitalism, how markets work. And, as I pointed out earlier, Marx used those same works to support and illuminate his theories, as well as an enormous amount of research, hard numbers and history, out of the London Library and the mills of the industrial Midlands. It's not all theory, he collected statistics. Marx did to classical economics what Einstein did to classical physics: not reject it, but extend it. Das Kapital is the Special Theory of economics. It is Relativistic Economics.

Have you ever wondered why or how post 19th century capitalism evolved into the relatively benign form we have today? It certainly wasn't because the owners and bankers were enlightened and liberal thinkers. Capitalism reformed itself because it had a rival, socialism. The workers were revolting from the start of the 1800s and by mid-century European capitalism was in crisis. The people would simply no longer tolerate it. America was a sleepy agricultural country with lots of free land and slave labor, busy with its own problems, but Europe was fallling into chaos. Read up on the Paris Commune and the 1849 revolutions. At mid-century all of Europe was like post WWI Germany, or 1917 Russia.

Socialist ideas were politically incorporated into capitalist societies and the result was that this synthesis proved better than either capitalism or socialism by itself. The capitalists resisted, they still do, but they also compromised, which meant the middle class grew, small capitalists became more numerous and more prosperous, general standards of living arose, unions provided a voice for workers, social services provided a safety net, regulation improved safety and working conditions, governments became more democratic,...I could go on. And all this was accomplished without either the wage slavery Marx predicted or the chaos and revolution the capitalists feared. You mentioned that Marxism never accomplished anything. You're mistaken, Marxism saved capitalism from its own excesses. Just look around you today. We are not living in the world of Charles Dickens, are we?

You owe it to yourself to read some Marx, and keep a copy of Smith's "Wealth of Nations" nearby, too. Don't try Das Kapital, the prose is impenetrable and very technical, but there are numerous sympathetic abridgements and analyses, even Wikipedia (where I got my quote about the petty bourgeosie) has some good stuff. You won't agree with everything Marx said, I know I don't , hell, even contemporary Marxists argue and debate amongst themselves in how best to interpret and apply his analysis to modern times. But it is part of your education you can't afford to overlook. Reading Marx is like reading Freud or Chomsky, even if you don't believe a word of it, you don't realize how much his thought has influenced the modern world, even his most violent critics subconsciously use his logic.