To me it is not necessarily a Gen Y thing, or anything else regarding the times. Skills are not necessarily in freefall, but there is a level of "cancer" in the training industry brought about by a few latent issues alluded to above.
When I was trained as a flying instructor, I was given a letter from the CFI of the school (which I still have) and I have passed copies of it onto flying intructors, supervisory / training / check pilots that I have trained over time.
I paraphrase:
"You have decided to become a flying instructor. Since this should be the pinnacle of a flying career and not merely the start point, I will outline for you a few basic rules..."
It went on to stipulate that flying skills should be refined, knowledge needs to be accurate and broad, etc, etc.
I thought it was well put and places appropriate perspective on the various niches of our industry. I feel that, unfortunately, the root cause of the problem is that most individuals working through the industry are simply "ticking boxes" to try and get to the magical airline job - which is fine. However, they need to acknowledge that on the way to that job, they will work in various aspects of the industry that will not have a direct correlation to heavy jet RPT - and while ever they are taking pay from GA operators or flying schools, it is their moral and professional obligation to take an active interest in VFR navigation, short field landings or piston engine technical knowledge. That is simply what professionals do. Taking the money, whinging about entitlements and subverting the employer does nothing to strengthen the industry or make it easier for those who will come later.
Therefore it is simply a matter of choice for the individual - actively seek to gain the most broad professional development base possible - and maximise the chance of being one of those airline captains that juniors look up to, or just bide time, tick the box, taxi slowly to get "hours up" and be one of those pilots that simply make up the numbers.
When I look for pilots, who will invariably be in the early phase of their career - I look for the attitude that describes the former.
Approaching GA with the "QANTAS captain in waiting" attitude is dangerous - not only does it put lives at risk, but the livelihood of others coming through too.
I do agree with the earlier thought regarding flight instruction and GA as a career - I think that in certain areas of the industry, we are seeing a few opportunities for just that - with sound lifestyle and good conditions. Hopefully this evolves further...