"...the rigmarole, standardized testing and the frankly, delayed, development for bright students is just completely different than the kind of education that most of these bright minds had.

...The system simply rewards and produces specialized graduates as a result of modern education and employment practices, so that's what we get."

I think you're pretty close to the mark here. I'm reminded of a discussion I had about a decade or so ago with the head of the physics school of one of the local universities where I live. Before the discussion I'd only known him vaguely as the group where I first met him had nothing to with physics and I'd never discussed physics with him previously, nevertheless our conversation deepened to the point where he was correcting my somewhat vague notions of the quantum mechanical model of electrical resistance. The conversation then somehow segued into one about the depth and breadth of specialized knowledge and the difficulties of how one ought to train students and specifically PhD candidates. He used an instance from his own school to illustrate his point. During the evaluation of a PhD candidate whose study was on some specialist aspect of the all-too-familiar LED one of his colleagues asked a straightforward basic question of the candidate about how a bipolar transistor worked and how it was able to amplify a signal and he was completely flummoxed and could provide no answer. Almost anyone with basic electronics training could answer the question (that is without delving into QM) but he could not, nevertheless there wasn't any question over whether the student knew his work on LEDs as clearly he was well versed in the subject.

The professor then expressed great concern that something was wrong with the way we teach and or direct PhD candidates and it wasn't just limited to his school but essentially it was the norm almost everywhere. The point he was making was that a diode junction in a normal bipolar transistor functions as does a LED at its most basic (conduction) level and thus the candidate should have made mincemeat of the question in a second but he could not (electronics is a large part of my profession so it was an elementary question for me). He went on to express the fact that educators were doing a disservice to candidates such as this person because if his work became less important he could become unemployed and would have to be retrained. He stressed the fact that training should be broad enough and sufficiently cross-disciplined ensure those specializing in physics would remain employable throughout their careers and that instances such as this ought to be awake-up call.

A similar event happened some years back in the physics school at another of the city's universities. A professor who was well known for writing the new textbook for high-school physics set a one-line question in a third-year university physics exam which simply asked:

Explain F=ma

Surprisingly, this question flummoxed many students. I'm unsure of how many students were confused by the question but is was sufficient to cause somewhat of a local uproar at the time. It seems some students troweled the depths of Lagrangian mechanics citing Lagrange's equations and so on whilst others simply didn't know what to do. The answer the professor actually required was:

Force = time rate change of momentum

(mv−mu)/t = m(v-u)/t

but a = (v-u)/t

∴ F=ma

I gather the proportionality constant 'k' wasn't even required. The point the professor was making was that students had lost the woods for the trees and that their training was too linear and predictable thus accentuating the problem.