Here's a thought...if the way things are being done means lots of people (I'd say most) working at far below / far away from their potential -- with or without regards to formal education -- then how about DOING THINGS DIFFERENTLY?
When I see/hear stances to the effect of We Don't Need So Many Educated People/We Still Need Ditch Diggers, my response is this:
How many software engineers did we need before the first software engineer?
How many genetic counselors, biophysicists, electric guitarists, and (insert-your-choice-here) did we need before the first of each of those?
As they might have phrased it in Mr. Mom... if you truly can't conceive of any productive role for having a greater number of educated people (formal or otherwise) in the economy... then the economy is 'doing it wrong.'
I absolutely agree that WITHIN WHAT WE'RE USED TO LIVING UNDER, there's not much space for a massive expansion of folks with high-level formal educations...to which my response is...OK THEN, let's live and work differently.