I remember you telling that story before, Centaurus, and it still amazes me. It is absolutely unacceptable, (the crew's inaction was unacceptable - not your story!).
I also remember flying BAe 146s out of Heathrow. Our aircraft had no auto-thrust, no auto trim and only basic Ap's, and we had to capture the VOR radials manually. So the SIDs and noise abatements were basically flown raw data on the HDG bug. When we were inbound to Heathrow, we manually joined and flew the Ockham hold on raw data with the heading bug - making the drift compensation ourselves, there being no automatics for holding. It all worked and we were pretty good at it through constant practice.
Many years later, if ATC vectored us in too tight and above the glide-slope in an A320, I found it much easier to drop out the AP and manually fly the aircraft down to the G/S than fiddle about with the ALT and V/S. On very turbulent approaches, I take the AP out earlier rather than later, to get into the groove of the weather conditions, so that by around 4 nm, my responses are nicely up to speed and in control of the aircraft. (I normally leave the A/THR in on A320/321 though - it usually does a fine job).
So why do we get pilots such as those Centaurus observed, and of the recent gear-up and overrun accidents? It has to be down to poor checking, and letting pilots through who should be failed and retrained. I am also not sure about company TREs examining their own pilots - it must be very difficult to remain objective consistent and fair, and to fail a senior manager or a chief pilot?
Automation dependancy is to some degree caused by pilots who have very low experience of hand flying and raw data - maybe none in commercial line flying. Automation in an Airbus FBW is so good that a poor or inexperienced pilot can "get away with it" 95% of the time - like car drivers who have a licence to drive only an automatic and would not be able to cope with a manual car. This is not the fault of the Airbus but of the old training and checking regime. Chief pilots need to bring in protocols to strongly encourage or even mandate manual flying on the line. I believe that Airbus more recently trained new pilots without the automatics to start with, and only bring those in once the basic hand flying has been grasped?