Purpose of G13 is to protect Seireitei as stated by Tenjiro.You must be registered for see images
Gotei 13 translates as "13 court guard squads" bach is saying that this wasn't their purpose. They weren't their to guard or protect anything. They were protectors in name only. he is saying that they were just a bunch of thugs and to me this means that the current Gotei 13 is dramatically different than the previous, not only in purpose, but when Bach says "you were really just a group of merciless thugs" it sounds to me like they were outlaws or at least more akin to a gang than a government. It may have been technically created before, but the current G13 was definitely formed after Bach's defeat and I think that this holds a lot of meaning.
What Yhwach trying to say is that G13 weren't good guy as we think (at least wasn't in the beginning). It also was said by that 6th seat from 13th division, Kajomaru, that neither side is goog guys here.
You can see that Wandenreich is created for the purpose of fighting against G13. But what G13 are created for than? If Yhwach said that they weren't so good, it actually could mean that in the beginning primary purpose of G13 weren't protecting seireitei, but maybe fighting Quincies and that was more improtant. I think that's what Yhwach trying to say.