If it wasn't for the Chantry, the Circle wouldn't even exist. Mages would just be hunted down over and over again, with no refuge or formal education. It was chaos after the first blight, when mage hunters ran rampant. They created the Circles at first to protect them from the likes of mage hunters, and because they thought mages could do good. It was the Chantry that was trying to not be zealots. It's gone bad because many Templars only see themselves as mage hunters now, like the old days.
"The thing to remember as well is that the Circles were created to help Thedas as well. We had the Blights, and the first Circles were created shortly after the first Blight. The mages become vitally important when there's a Blight in order to combat the darkspawn. So it wasn't like the Chantry wanted to cripple the mages, they wanted them to have the power they needed to help humanity." - Gaider
You're right. Without the Chantry the Circle would cease to exist. The concept of it is a great idea, and should be kept, but poorly managed with ridiculous regulations and standards. The Libertarians from the Fraternities of Enchanters are not against the Circle, and didn't even want the circle to depart (Like it did in Asunder), just want the circle to become autonomous, self-regulating order without the Chantries interferance whatsoever. The Chantry turned the Circle of Magi into a prison. Mages as young as 6 are forcefully taken away from their homes and taken to the circle where they don't truly experience true love. The mages are not allowed to have children of their own, and once a mage comes to full terms, and gives birth, the chantry takes the child away as soon as it comes out from the mother without ever allowing the mother mage to have the bonding experience that she needs during such duress times.
If "The mages become vitally important when there's a Blight in order to combat the darkspawn" then why treat these important beings like a bunch of prisoners, and to lock them up in some tower away from the rest of society?
"The mages have served us well, in many wars over many centuries, yet in times of peace how well have we served them? We mean them no harm, yet have we not harmed them even so?" - divine justinia v (From Asunder)
People react positively by the rewarding system. You do something good and you'll be rewarded. Whatever happen to all of the remaining surviving mages that fought the blight, and help saved Ferelden from the blight? Did they get a clemency from the Chantry by granting them their total freedom? Or did the Chantry forgot what these mages did, and just tossed them back into their circle prison where they do nothing but read books all day? Sure they gave Wynne some freedom, but what about the rest?
When a mage undergo the Harrowing and passes... why aren't they allowed to leave the circle as they please? They've proven to the Templar's that they can resist demonic possession. Instead they teach the gullible mundanes how dangerous mages truly are, and that they can "save" them from the evil mages. That is why mages are bullied and ridiculed. Some mages even hate themselves, wishes that the Templars would just kill them because they were taught that they were a curse to society all thanks to the Chantry.
"You mean us every harm! It's the Chantry that teaches them to fear us! "You keep us under your thumb, reminding us again and again how you let us live only because we're useful!" - Angry mage (Asunder)