EU: Good or bad?

A friend of mine wondered the other day whether the European Union (EU) is a good or bad thing. Roughly he said:

That peace remains within Europe and human rights are generally respected. People not being killed in state-run concentration-camps and private property rights are sacred as far as that goes. That no wars are in Europe anymore and so on. Acid not being pored on people as punishment in Turkey, and more.

Or how much bureaucracy the EU stands for, which costs people loads of money each month and prevents tax-cuts etc.

Is the EU good or bad? Are the pluses bigger than the minuses? In my opinion: Yes.

But the European Union has evolved a lot since its founding after World War II. Originally it was a free-trade union between the biggest economies in Europe, and as such grew into tighter and tighter relations on the whole political spectrum. Today the EU has become a huge block of red tape and regulations and the economy of Europe as a whole has as a result grown to an almost complete standstill. The free trade, which eliminated wars and resulted in great increase of wealth, respect for human rights and clear protection of the private property right, has evolved into a superstate of regulations and restrictions with regards to relations outside Europe and flexibility within Europe, and an ever-increasing reluctance to give back freedom which has been tied into institutions and state-supervision.

I have no doubts about the peace-keeping role of the EU, and the EU itself forces its member-states to do many good things they would otherwise not do, or do only when they have no other choices (e.g. liberate various markets from state-monopoly, and suppress customs and trade-barriers within the member-states). However, if the trend of state-merger continues I fear that the EU will crumble from within, having forced one too many regulation down the throat of its members. There are limits to how much a single, centralized government can do for hundreds of millions of people, especially when it continues to remove power from local authorities to the global one. History teaches us that when a superpower of bureaucracy grows too much in ambition, power and size, it will eventually disintegrate from within, splitting up into blocks or collapse totally into its elements. I hope this won't happen to the EU since some of its members have a great tendency to fights its neighbors, but the risk is there.

Why doesn't the EU aim on looking more like the World Trade Organization, which only holds limited power over its member-states, and has no interest in making detailed plans for individuals - instead focusing on keeping governments on track when it comes to freedom of trade and respect for private property rights and human rights?