No need to be condescending!
I feel that bullying is unavoidable until very far in the future (I'm talking about sci-fi times). In any social situation, especially one with children, statuses will be developed. You know, "nerd", "goth", "jock". That's basic. It has an impact on everyone, though. I've been a nerd, a goth (blunder years), and right now I'm what they call a "cool nerd" (because nerds are cool or something). I feel like this has a major effect on bullying. I know a lot of people in my school, some people who were bullied, and a few bullies. The bullied are the "nerds" in every situation I've seen, be them preppy or socially awkward. Any "neckbeard" is picked on, naturally.
If we were to remove those statuses (nerds, neckbeards), then I think I know what would happen. The cool kids would find another status to be lame and vulnerable, and then pick on them. Not that I know of any way to possibly make nerds stop being nerds. That would be possibly more cruel than bullying.
The statuses and labels cannot go. They are inherent. Instead of removing the reason for bullying, then, remove the bullying! I won't go into this one, though, because you can't do that. You can't make bullies not be bullies. That involves counselors who cannot help, and more importantly, finding out who is a bully, to what degree, and if it's worth stopping them.
I think that, once again, any social situation with children will eventually lead to labels, which leads to bullying. There's solutions, but they involve isolating the children, and that is clearly not something that can happen any time soon.
With all of that being said, I feel that the system is the best the way it is now.
The biggest flaw in the current system (to most people) is that there will always be extreme cases of bullying (suicides, shootings, etc.). However, I feel that a lot of those were partly due to the victim being psychologically unbalanced. That's something that can't go ignored, since there will always be unstable people out there.
If I've said anything out of line, please go easy on me. Thanks for listening!