While I don't know the people involved with Challenger - I was in 6th grade at the time - it goes well against my own experience that NASA management had anything but the interests of the crew in mind. To a fault. In fact, your average NASA employee doted on astronauts like a star struck little girl. What the crew wanted, the crew got. You could always tell who the astronaut was when you saw a group walking about the centers - he/she was the one whose every semi-whimsical comment extracted voluminous and polite laughter from the others in the group.
I was, however, working when Columbia blew up. In fact, my mission was supposed to fly on it when it got back. Although sad, I feel comfortable saying that most of the people working on these things sort of know it's going to happen from time to time. It wasn't exactly surprising to us or the crew.
Blaming managers and celebrating engineers is overly simplistic. The line is not as well defined as you might think. I had few - if any (I can't think of a single one, actually) - managers (either contractors or NASA employees) who were not experienced engineers.
The safety rules for a shuttle payload, let alone the actual orbiter, are voluminous and arcane. It is the primary reason that very little new technology comes out of the manned space flight program. Everything new is considered too dangerous because it hasn't been flown before.
This stuff is insanely dangerous. It is pretty damn easy to come up with a way some piece of hardware you're working on could kill someone. The complexity is enormous. The number of people involved is in the thousands, and they're spread all over the country. Different centers have different rules.
As a result, you make life-and-death decisions literally every day. It's not such a big deal, because there is a lot of formal process in place to make sure it gets done right. The the "standards" are what keep space flight as we know it as safe as it is. Are they or the processes by which they are enforced perfect? Hell no.
The system failed. People failed. But we knew this would happen, and we did it anyway because it's the price of exploring the frontiers. We learned from Challenger. We learned from Columbia. We will learn from the next catastrophic failure. NASA isn't perfect. In fact, you might say the bloated organization and government involvement makes this sort of thing inevitable. But I bet the small privateers exploring manned space flight will run into their own challenges.
Basically, what I'm saying is that we need to keep this in a larger perspective. Obsessing over one failure in what is a centuries-long quest is not helpful. Dissect it, learn from it, and move on.