The problem here is that the patent system cannot handle the software equivalent of synonyms, words and phrases which mean that same thing but say it differently. Let's call software that does much the same thing, but does it differently, synonymous software. For example, Microsoft's IIS server, which is a web server, is synonymous with Apache, a very different web server program. Just like synonyms in English, they are not completely equivalent. Microsoft and Apache use very different extension mechanisms, and the capabilities of the two are different, as well as their ability to run on various platforms, but in terms of what they do, they are very similar, and in general, if one piece of software can do something, so can the other.
One can draw a strong analogy here with the connotation of a word, versus its denotation; both IIS and Apache have the same "denotations" as "web servers", but very different "connotations". Also like English, the same word can have multiple different meanings, and thus have certain senses of a word be synonyms for several sets of words. Example: "Ram" is a synonym for "mountain goat" and "bump into". Some software is flexible enough to be "synonymous" in multiple ways with different sets of software. It's just as complicated as English, which is to say, very complicated. This should not be a surprise, because both English and software use language to communicate, which is one of the most complicated things around, especially when in an environment where the language can be directly executed by a machine.
Because the Patent Office is trying to force communication into a model that was created for objects and processes, it has had to make determinations on what to do with synonymous software. As previously mentioned, there are many ways to say the same thing, such that for a complicated system, which might be factors of magnitude larger then Shakespeare's entire collected works, the odds of somebody stumbling onto the same "phrasing" of that complicated system as the patent holder are astronomical. (Shakespeare's entire collected works are available from Project Gutenburg, and are approximentally 5.5 megabytes. The Linux Kernel source code, just the C source code alone (which isn't the entirity of the kernel) is appoximentally 120MB in version 2.5.70, and still growing.) A patent that narrowly covered only exactly what the company produced would be of no value. Therefore, the only option the Patent Office can stand to consider is the position that all synonyms of a given patent are covered by that patent. (Cynic's note: Handing out worthless patents would make them impotent, anathema to a bureaucracy, all of which inevitably perceive themselves to be of supreme importance.)
This is intolerably broad. It's so broad that absolutely absurd patent battles are emerging. According to this Forbes Magazine article Amazon Tastes Its Own Patent-Pending Medicine dated October 13th, 2000, OpenTV tried to take control of Amazon's One Click Shopping patent. OpenTV makes television set-top box software and infrastructure, and one of the capabilities of their software is the ability to enter credit card information once and buy things by pushing some sort of "Buy" button while watching TV, for instance purchasing a Madonna album while watching a Madonna music video.
In this case, the difference between the two systems is even larger then the difference between Barnes and Noble's system and Amazon.com's system. An interactive television implementation and a web implementation of "One Click Shopping" are so different that they are hardly even recognizable as the same thing. Even if somebody had experience working on one system, if they were hired by the company implementing the other, the experience working on the first system would be of almost no value whatsoever. How can these two companies in two different businesses with totally different technical resources and entirely different languages be conflicting with each other's patents, if the Patent Office is not giving out patents on entire concepts?
As a defensive measure, software companies have taken to simple generating as many patents as possible in as many fields as possible, to build up a patent portfolio. Frequently, these patents partially or totally overlap due to poor prior art checking (done deliberately by the applicant and accidentally by the Patent Office). The point is to make sure that nobody can sue the company for patent infringement without the company being able to counter sue for some patent infringement themselves, an arrangement strongly resembling the Cold War policy of Mutually Assured Destruction. This should be taken for a sign of sickness in the system though, as this has negative effects: First, it negates the point of a patent anyhow when it isn't really possible to sue a competitor for infringement without being counter sued, because the only way to do business is for the most part to simply ignore patents entirely. Second, it completely artificially raises the barrier of entry to starting a software company, because a new company will not have such a portfolio and will be intensely vulnerable to a patent infringement suit by a competitor, unless they are in a totally new field (breaking new, unpatented ground) or a totally old one where all relevant patents have expired. The former is extremely rare, possibly non-existant, and as for the latter, any field where the techniques have been well-understood for more then 17 years is not likely to have room for a new competitor.
The only way to see the current patent system as a good thing is to look at it with the belief that the purpose of the patent system is to line the pockets of certain companies with money, at the expense of innovation. Otherwise, software patents make no sense.