Sounds like they are the ones who are not up to the job. They lost control and this point really should be highlighted to your boss. Also it sounds as if they cut way to many corners and expecting way to much. Certainly this is not worth staying in such a poor environment.

Of course this is going to involve some pain in sorting this out in order to leave but just remind yourself that it is their loss not yours.

It is all well and good people saying they would say this or that but the reality is that a lot of us just want to get on with a job without having to massage other peoples egos and put up with all the other bulls***t that people seem to want to bring to work.