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It's a complicated issue. If you're interested in reading about it, i would recommend "the death and life of great american cities" by jane jacobs.
As for the question of whether something should be done, and if so whose responsibility it is to do it, i believe that something should be done, and that if private individuals can't provide the initiative, the public sector should step in. I think that it is in most everybody's best interest if the number of bad neighborhoods is minimized and i don't have a problem with my tax dollars (or yours, for that matter) going towards that cause.
Ideally those looking to improve things should understand what they're doing so that they don't actually make things worse - from what i have gathered, it is fairly common for well meaning city planners to actually make things worse.
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