Yytz,
I agree that there needs to be an emphasis on derech eretz kadma l’torah. Sadly, I see mainly BT and convert families teaching their kids these things, and not enough FFB families emphasizing the need to be ethical, moral, and law-abiding.
In my experience, and the Pew report confirms this, kiruv doesn’t really help in making people fully observant. It does help, though, in helping the non-Orthodox have some sense of a kesher to Jewish practice. It’s not easy to convince people of the primacy of halacha and whatnot.