So Madara and Hashirama's concept was not How to End The Shinobi System, but rather to make it more Humane.

I think they succeeded intheir goals. Today, instead of random clans fighting wars while creating and breaking temporary alliances, the Naruto World is populated by Hidden Villages where children are trained to join the Adults, but never have to actually fight in wars. The system may have been improved beyond this had Madara not gone Major Emo and started hostilities from the inception of the Village System.