Psychology and psychiatry are worlds apart and I think you're confusing one with the other.

Psychiatry fits within what you described: individualized treatment, medication, etc. It's a branch of medicine after all, and it fits within the whole context of medical care as it is conceived currently (that is, brushing aside social context, community, etc)

Psychology is all about context, that's kinda its motto. A good therapist always considers the family, socioeconomic backgrounds, all the things you say it ignores.