It has always been that way, it is not new. In the early 60s, a friend taught English in a Calif community college, and I got to read his students's papers. This was for a bonehead English class. The best were ludicrous. The rest were unintelligible.
A while later, I got to talking with Josephine Miles at Berkeley. She was supposed to be the pedagogue who designed or maybe helped design, Calif's English curriculum, I think in the 50s. Too many students were arriving at Berkeley unable to write a paper. The old English 1A and 1B plus the bonehead English courses for those who flunked the English admissions test, were supposed to help correct the problem.
I'm talking about 1962 now.
She told me that she was disturbed that students could not recognize subject and predicate. She made it clear to me that she did not mean simply not know the terms, but fundamentally unable to separate the subject and the predicate in a simple thought. The idea that there was a thingy that "did" an action to another receiving "thingy" was something many college students were unable to grasp. She told me it was a real intellectual failing, not just ignorance.
You all aren't talking anything new.
As for higher education being nothing but trade schools, yes indeed. Noble's _America by Design_ documents the deliberate perversion of our schools by the technology based big corporations at the turn of the century.
However, I don't think anybody should feel nostalgia for a mythical better time in academia. Harvard was founded in the 17th Century as a divinity school. In other words, as a trade school to turn out certifiable preachers. Granted, preaching was a liberal (in the old fashioned sense of the word) profession, but IMHO, there is no fundamental difference in churning out preachers than in churning out EEs.
I think that in all times and places education such as it is has been made to serve the economic interests of its society.
A comment on uninterested students: I once argued (probably wrongly) with a cubicle mate that the general lack of interest in poetry might be due to the fact that poetry is difficult. Because it is expressed in language, I said, misleads one into thinking it ought to be easy to understand. But in calculus, nobody expects the problems to be easy to understand, and maybe a difficult poem is in some way comparable to a difficult minima problem.
The guy look at me incredulously. He said "John, I didn't study calculus for fun."
And that was it. The great light dawned. This poor guy never did anything for fun. He was dutiful, he worked hard, not as hard as he could, but hard enough to pass muster. He had no pleasure in anything he studied, but he got his assignments done more or less acceptably, and on time.
He was well prepared by his schooldays for a lifetime in the corporation. Now he works at assignments that bring him no joy, for a manager instead of an instructor, and does his assignments minimally well. There is just no difference between his career and his preparation.
-- Homines id quod volunt credunt.