OP...I hear you loud and clear and I know what you are going through. I had a similar experience and completely washed my hands of white hat seo (which is all I have ever done) and came back to it a few months later with fresh eyes.
I now only do black hat because I'd rather get penalised for sites that had very little effort from me (black hat techniques and tools) than for long winded, time consuming white hat techniques.
Funny thing is,all my sites are now back on the first page and not one of them has had any white hat work done on them since I was originally penalised.
Google is a game and you have to play along or die.