George Weigel’s book Evangelical Catholicism uses the term “Baptized Pagans.” It’s a good book that can help you understand the state of the American Church.
If you continue to explore Catholicism, you will meet many people who have the view of your friend. The US is still trying to get over the effects of the 1960s sexual revolution. Rejection of authority of all kind in the last two generations hurt the Church, but like others have said, it hurt Protestants too. Traditionally, the faith was primarily spread through the home, but many in the last two generations didn’t receive instruction in the Catholic faith from their parents. So, there is much, much confusion.
Weigel notes in his book that we are in the process of a transition from “cultural Catholicism” to “evangelical Catholicism.” As there is no cultural stigma for not going to church anymore (really, now it is the opposite!), in the future the only people who will be there are those that truly believe in the faith. He sees a smaller but more faithful church coming. Younger Priests are also really, really on fire to teach the complete truth of the faith, including morality. That will be very helpful for the Church.
Furthermore, the effects of the sexual revolution have been individually devastating to many. God is always calling people home to him. Many will give the Church and her teachings a second look once they’ve experienced the exhaustion of living a life of sin. You’ll meet a lot of people on this forum that call themselves “reverts,” who fit this description.
Find a parish with a good orthodox priest and a good RCIA. I think you will be pleased to find that despite the problems the Church faces in the US, there are many, many faithful Catholics, who have a strong belief in the Church and her teachings. Often you will see these Catholics every morning, rain or shine, at daily mass :).
The Catholic Church isn’t like the modern mega-Protestant churches whose only attendants are those who chose to leave whatever faith they had and go to church there. So, there may be less “energy” in a Catholic Parish, less activities, etc. But, the Catholic Church contains the entire truth and the fullness of the Christian faith. Our goal is the make it to heaven, and we want to be on the right ship to get us there!
There have always been problems in the Church, just as Christ said there would be (see Matthew 13:24-30). In fact, at times the problems have been much worse, just look at the lives of the Saints through out history who have experienced great persecution for attempts to reform their religious orders or the Church.
Don’t let the behavior of others influence your decision about the Church or how you will live out your faith if you decide to join the Church. Remember, when you die and meet God, they won’t be there at your judgment and you won’t be there at theirs!
Good luck in your journey. God bless.