The institution is just a structure to organize our activities to help us function. Eugene has the right of it—the institution is a dead thing that protects and gives form to the live thing underneath. But that points us to the reality that the structure isn't going to do the work of the church, because the structure isn't the church; we together are the church, and the structure is there to enable us as we do the work of the church. To avoid facing that, though, we tend to pile those expectations on the institution instead, and then when it fails, we blame it, and denounce it, and set off to find a better way . . .
I also suspect that we object to the "institutional church" because it gets in the way of us doing what we want; but in reality, that's part of its purpose. Yes, there is a tendency for institutions to become self-justifying and self-serving, and that's a bad thing; but is that the fault of institutions, or of the people in them? That's a human sin, and attacking institutions won't change it. If anything, doing that makes it worse, because the existence of the institution, for all its faults, reminds us that it has a purpose. We can still do all the touchy-feely "spirituality" stuff that's all about us without any kind of formal structure, but a congregation that never really goes beyond that is about as self-justifying and self-serving as anything can be; what we need the institution for is to do the things that take us beyond ourselves, the things that actually require work and effort and need organization and structure to support them and keep them going.
We can throw in all sorts of distinctions between little-c church and the big-C Church, between buildings and people, between boards and bodies, and whatever else.
I view some of this the same way I do when people start distinguishing between "relationship" and "religion." If what they mean is they want to follow Jesus into freedom from legalism, I'm all for it. But so often between the lines such distinctions reflect a desire to have faith my way, to treat discipleship like Burger King. When many say "It's a relationship, not a religion," what they inadvertently propose is a relationship without obligations or expectations. We talk of not wanting to jump through hoops, but what we really mean is, we want to do as little as possible to still be in good with God.
And of course we can't do anything to get in good with God; Jesus has already done it for us. But sustaining any kind of meaningful relationship without religion -- disciplines and exercises which we commit to in a spirit of service and submission -- is impossible.
For me, it'd be like doing nothing around the house, not mowing the yard, not feeding my kids, not taking care of the responsibilities I have, and then excusing it to my wife by saying, "Hey, I want a relationship with you, not a religion." Or, "I like being your husband, I just don't like the institution of marriage."
It doesn't make sense.
So this is a call to many on the fuzzy edges of abandoning the institutional church to reevaluate just what they think that means, and then, evaluate if it's even possible.
Ecclesiological utopianism is bound to fail, because we've all sinned and fallen short of God's glory.