I am from Los Angeles, and being that most clues point that the family is probably Californian (although the facts hardly ever match up) I think it is an realistic view on life but in an exaggerated way. I disagree that sex, drugs, and alcohol is a standard of every boy's teenage life. Yes parties with alcohol and stuff in High School exists, but if you compare the number of people who attends these parties to the total number of people in the school, it is not a majority at all. Hollywood and TV love to focus in at this aspect of teenage life because it is entertaining. A majority of teenagers life probably will not be entertaining enough to put in a movie. Do you want to watch a teenage girl talk on the phone for hours, or watch a teenage boy listen to his ipod for hours? No that's boring.
OK back on the topic of MITM and it's lack of what I'm talking about, we realize that both Malcolm and Reese are somewhat "loners" in their school (I forget the episode where they find this out, but I think it has to do with a party). I think this a brilliant idea on the writers'/creator's part, otherwise they will not be the characters we know and love today, instead it will be 'just another teenage TV show' focusing on the popular kids' lives, that is more like The WB type of stuff, not FOX. i can not remember one FOX sitcom ever that had popular kids or teenagers, usually they are loners, losers, and bullied.
Malcolm is not popular because of his personality and smartness/vainness (we all know how Jessica bring out his flaws), and Reese is not popular because i think in high school he was somewhat a loner, he never really did have any friends, and in his younger years he was a bully and people were afraid of him.
And to be honest, you will not see anyone of Malcolm or Reese's types at any high school party.