Why are parachutes so useless?

TL:DR: chutes are not magical balloons, especially since update 1.0.5

Chutes will only slow you down from terminal velocity in thick lower atmosphere (~250ms) to landing speed (~10ms). Rest is up to landing legs, engines and clever engineering.

Do not land on engine, just don't.

For Career, you want some kind of Stage Recovery Mod

For example this one.

Parachutes are not intended for soft landing, both in real life and in KSP

There is a (lot of) reason why SpaceX uses powered landing instead of chutes.

Apollo capsules landed at ~9m/s. That's ~32km/h. Ouch.

And do not even think about Space Shuttle boosters. Their impact velocity was 23m/s... 83km/h. I wouldn't dare to call it landing.

KSP follow up on that. In arcade manner, that is.

Do not bother slowing below 6m/s with chutes

There is a lot of fake math involved (KSP aerodynamics are weird) but 6m/s is pretty much practical limit for chutes on Kerbin so you can just accept it as a "law of pfysics".

Impact Tolerance > moar chutes

Impact Tolerance works as you could guess, it tells you how hard you can smash into ground and survive.

Empty fuel tank is just a can. (Liquid fuel) Engine is quite precise machinery, lithobraking is not advised. And KSP simulates it, somehow, partially... (well, its a game ;)

If you want to survive landing lithobrake with structural parts, not engine.

For example:

1. Mk1 Command Pod: 14m/s - safe to chute down
2. Science Jr.: 6m/s - don't bother landing on it
3. Heatshields: 9m/s -it can save Science Jr. just by being below it. Sometimes. Other times Science Jr. will score collision with heatshield and explode anyway.
4. Fuel tanks and (lower tech) engines: below 10m/s. Higher tiers have higher values (spiky Aerospike have 20m/s because magic).
5. Service Bay's: 14m/s - very good thing to place on bottom of lander
6. Landing Legs: 10ms/12ms - Note: it can get damaged under heavy payload or harder collision.
7. Girders and I-Beams: 80m/s - build a cage out of them around sensitive parts and you are (relatively) safe.

You aren't supposed to be landing entire ships with chutes. Like in real life only the manned capsule can be landed using only chutes. Still I'm surprised that the ship can't handle the landing.

You have a few options:

1. Try not using the mod "Realchutes" - that's probably the problem.

2. Make sure you're not using drogue chutes (they're the orange chutes.). The regular chutes are blue.

3. Use some landing legs to take some of the landing impact.

4. Try water landings. They're softer IRL and KSP.

5. I use the mod "StageRecovery" which automatically trys to land parts that are out of "physics range".

In your staging diagram, which is on the left side of the screen during flight, the parachute icons will have a particular color. If they are all red, then the parachute is destroyed, either from impact damage from another part/ship, or that it was deployed when the craft was going way too fast. You can set the altitude of deployment (or something to that effect, I'm not where I can look at the moment) but I usually deploy them manually via staging. The simple fact of the matter is, they will slow down a craft, but not enough to land entirely. I usually try to save some fuel to land upright (the same way I launched) but use the parachutes to slow my descent so I don't need as much fuel.

Drogue chutes are made to be deployed at a much faster velocity, but won't slow you down for landing, but rather just decreases your speed for the purposes of allowing you to open your primary chute. (Taken from the wiki page for drogue chutes).

So if you find that your chutes are getting destroyed just as you deploy them, then you are going too fast, and either burn retrograde to slow down, or try using drogue chutes to slow your vessel enough to safely deploy the regular chutes.