G-S prevented commercial banks from using their depositors money to finance profit-making investments other than loans.

The actual mechanism simply was to erect a barrier between different sorts of financial institution. One of the justifications for repeal was that G-S disadvantaged one banking sector by blocking investment in lucrative new opportunities compared to foreign and other entities not bound by G-S. some experts argued (and still argue) that merged banking is actually stronger now. Lets not go there ;-) but certainly if you look at the spectacular failures such as Lehman and AIG, they weren't bound by G-S anyway. If you look at the actually written subprime mortgages as opposed to bundled securities, many/most of the originators weren't bound by G-S either. Nor were foreign banks, but their exposure to subprime is limited. If foreign banks are teetering it's because they have too many liabilities- IOW banker greed again. Sure G-S was designed to prevent bankers cutting off the branch they're sitting on because all they can see is the wood, but they had found another way to do it and all the repeal did was redistribute the profits while the going was good.