What's Wrong with the Royals?

I have been a fan of Kansas City Royals baseball as long as I can remember. I grew up listening to the games as a child and can (barely) remember them winning the World Series in 1985.
In the 23 years since reaching the pinnacle of baseball success, the Royals have slowly become one of the worst teams in baseball on a consistent basis. Every year, I hear the same thing in Spring Training. "We've got the team that will win more games this year." "We're not going to lose 100 games this year, and a year (or two) from now, we'll be playing meaningful games in September." About mid-May, I hear the same thing every year. "I don't understand why we're losing games, we have the talent." And by July, I start hearing, "Well, next year, when _________ is healthy." "Next year, when _______________ makes it to the Majors." It's a sure sign that the Royals are losing so frequently that they practically have last place in their division all locked up.
I light of this consistency poor play, which has included blowing innumerable four-plus-run leads in the late innings in the last two weeks, I have to ask myself, what's wrong with the Royals? Well, I don't claim to be a guru, and I certainly would not want to be a manager or a GM. What I'm writing here are possible problems with possible solutions.
What's wrong with the Royals?
1. The lack of offensive punch. Jose Guillen has been a great addition; he gives Kansas City someone who actually can hit something besides the occasional double. The rest of the team, however, is ineffective offensively. The player with the best average on the team (excluding pitchers) is DeJesus, who is hitting .296. Compare that to the Texas Rangers, who have 5 players hitting over .300. Now, Texas is one of the best offenses in the league, so I don't expect the Royals to have as many guys over .300, but to have none is sure sign that the offense is not as it should be.
Solution? I'm at a loss here. Dayton Moore, the GM, has done everything he can to find a power hitter or two to put into the middle of the offense. There aren't that many out there that the Royals can afford. Perhaps, one of the younger players will develop into a power threat. That idea, however, leads me to another problem.
2. The inability to retain players. A perennial problem is the inability to keep solid players once they've reached their prime. Look around the league at some of the better players in the league: Damon and Beltran, for example. They came up with the Royals, but Kansas City was forced to get rid of them because their salary demands were too high. In all likelihood, the same thing will happen to all the young players who are being hailed as the "future" of the team. They'll be gone right as they're hitting their peak and could be part of a winning team. Which leads me to my last point.
Solution? Being a small-market team, Kansas City only has so much money to compete with the seemingly endless pockets of New York, Boston, LA, and San Francisco. The best solution in my mind is a salary cap. That, of course, would be blocked by the Players' Union, which has far too much power. Their reasons for opposing it are almost ludicrous. You're telling me that making $3.5 million a year isn't enough? That the market alone should be able to set value? The end result is a lack of competitive balance and the eventual collapse of the league. A salary cap needs to be implemented for the good of the game. Most of these major leaguers are making enough that if they manage their money well, they'll be fine once they leave the game.
3. The culture of losing. Their seems to be something that surrounds this club, an air of almost-mythical proportions. We've seen it in all of the late-inning collapses of recent weeks. We've seen it in when former Cy Young winners become complete duds. It must be something in the water in KC, because I can't explain it. Or, perhaps, there just simply isn't the talent there.
Solution? I don't know. Perhaps it's time for organization-wide psychological help. Something has to change if this team is ever going to get out of the cellar and become competitive again. Right now, based off of what I've seen, they're not.