I will not deny that in many situations there is damage caused by the current Mental Healthcare Model, I have seen many who suffer from the stigmatization of their struggles, both self-inflicted by how they are told to view themselves as well as inflicted by those that they hold trust towards; however, I cannot truly agree with your belief of it being people-destroying, but that is due to my own observations and experiences on both sides of the glass window.

As I had mentioned earlier in my own comment, one of the most important steps to be taken is to change the stigma of the labels, including the label of client or patient.