I think they may not have a fair assessment of their own abilities because of prior hand holding.
I haven't seen the emotional catastrophe element that this article talks about. But, I did witness the abuse of the faculty.
I saw the entitlement my generation is often accused of first hand. Many students were hostile, rude and lazy. I gained a reputation for sticking up for professors and calling my fellow students out on their behavior. In part I do blame the staff. Though maybe they couldn't gain control because their hands were tied by policy.
For me this wasn't just one class this was many classes and many students. So I think that the entitlement speak is of valid concern.
I do have to say that I did get into a bit of a war with the head of the CS department. He told me to cheat on a group project in order to make him and the department look good by doing all the work myself. I did give him some choice words and yes it was that much harder for me to graduate(this was my senior project). That was the only time I ever saw the lack of morality/respect first hand among faculty.
This is a problem I observed and experienced myself. Many kids (especially at elite schools) have been carefully honed to excel in high school and on tests so that they can get into good colleges. They start to think that they are massively intelligent and can do anything as long as they apply the same techniques.
Then they arrive at college, where all of a sudden a massive proportion of the population is at least as smart as them, if not smarter or harder working. Just as they are dealing with a bunch of emotionally roiling events such as living alone and having to make new friends, kaboom, their goes their overinflated sense of self esteem.
When I was at prep school exams were just a special week at the end of each term (maybe year, it was a while ago) - but not much significant effort was made to prepare in any way. They were simply a measure of how much had been gleaned from lessons.
A couple of weeks later we'd get a special "exam form orders" describing our results in relation to our peers (which happened every fortnight regardless - it's just this one was based on exams). Some people cared more than others, but I don't remember anyone being distraught before or after.
I'm also not sold on the fact that the kind of revision typically practised leads to long term retention - but that's just my humble opinion.