It however does not cast Social Services in a bad light. Cobra Bubbles does a lot to try to keep Lilo in Nani’s custody and I hate how overlooked that is. He legit shows remorse when he does try to take Lilo, which he only did because of her very reasonibly alarming phone call and the destruction of their house.
Point is they didn’t make social services into a heartless judgy entity

they actually made a good point about how a system originally designed to be consistent and fair can also lack the sensitivity and flexibility needed to deal with complex situations. this is shown both when Stitch is labeled a monster and when Nani is judged for not being able to earn a living and constantly watch Lilo at the same time. Neither happened because the people making the calls were cruel--Bubbles and the Grand Councilwoman seem to mean well, but both were expected to make judgments very quickly by their organizations... and both used loopholes to make kinder, fairer decisions for our heroes.

Let’s note that those decisions and loopholes included allowing Jamba and Pleakly to move in with Nani and Lilo, thus giving her some additional support (no matter how dubious) in maintaining the household and caring for Lilo.