I would like to have some references where it says that caste system is of hereditary nature.
I did a little reading at one point of time,and found out that the different castes were actually the names for different designations.
As for example,the Brahmins-people attached to studying,prayers etc... We call them scholars now.
The Kshatriyas-The warriors and the protectors of the law..We call them Police now.
The Vaishyas-The traders.. We sometimes call them Baniyas now.
The Shudras-The people entitled to make a community function properly by providing services.There goes your service sector...
So,its just a designation.Now there are certain group of people at all times in history of human civilization who will try to bend the faith to make it work for their own benefit,be it the Christian church of middle ages,the Hindu upper castes or the the Islamic mullahs...I think this is what has actually happened,and then became a part of tradition.