I think the public funding of presidential campaigns was already crashed and burnt...

As I read this article in the Washington Post a few things struck me...First:

Obama argued that he had little choice but to start raising money for the general election, because at least two of his opponents for the Democratic nomination, New York Sen. Hillary Rodham Clinton and former North Carolina senator John Edwards, had already rejected the public financing system that has governed presidential elections for better than three decades.

That makes it sound as if the last presidential elections the main candidates have participated in the public financing system...Let's flash back to 2003. Then this NY Times article from January makes some further points:

In 2004, President Bush and Senator John Kerry, the Democratic candidate, each opted out of the system for the primaries but not the general election. By accepting the public financing, they had to agree not to raise or spend any private money for the period after their nominating conventions.

But when Mr. Bush raised some $270 million, and Mr. Kerry about $235 million, it became clear that major-party candidates could raise far more from private donors than from the public system.

“The 2008 race will be the longest and most expensive presidential election in American history,” said Michael E. Toner, a commissioner of the Federal Election Commission. “Top-tier candidates are going to have to raise $100 million by the end of 2007 to be a serious candidate.” He added: “We are looking at a $100 million entry fee.”

Which to me raises the most important problem with this system, why would anyone want to participate in it knowing that those who don't, don't have to play by the same rules.