(I'm too lazy to find a fitting post to quote, so here goes nothing...)
A large fault in certain persons arguments is the thought that first, evolution will stop, and second, that it has a direction or target (ubermensch?). It does not, and I'll try to explain my reasons for saying so:
FIRST, evolution does not stop just because those with "bad" or "unfit" genepools survive. It just means that the mutations don't show themselves quite as much. For example, I've heard that about 5 (or was it 15?) percent of the human populace has four nipples: two "real" ones and two underdeveloped ones. Just because all the two-nipple people of the world haven't dropped as flies due to whatever those extra nipples helps the "freaks" with, doesn't mean the mutation doesn't exist, it just means that it will have a harder time becoming "common" in the human genepool.
SECOND, evolution does not have a target, it's actually just a series of mutations who create new species or at least traits in existing species. But then what is a mutation, you ask? It is actually when the DNA-replication during mitosis fails, due to either enzyme malfunctions or outside forces changing the result.
That's right, the whole pretense of evolution is failure, and for something that is supposed to be a random chain of mistakes to have a goal is quite contradicting IMO.
AND on topic, to answer the first question "is humanity worse as a species just because we don't let survival of the fittest take place?":
No, it just means that we humans are kinda breaking the law of evolution, thus becoming kind of a "cheaters of nature" where nature doesn't have the mods powerful enough to remove us (semi-bizarre analogy), if you catch my drift. If we would stop cheating at evolution, then that would practically mean we would have to remove all governments and go super-duper uncontrolled anarchy, where every man, woman and child is for themselves.
And cheating evolution seems like the better option for me, that's all.