Unless they're solving crazy hard problems, a lot of engineering types are just going to be underwhelmed. Add in a lot of early success and that quickly turns to cynicism and frustration.
That is a really good point but part of the entrepreneur bit is unlearning to a degree - tempering if you like - and thinking how can I convert technology into something users want. I see ample evidence of pure technologists viewing ideas without this frame of mind. Entrepreneurship is the union of the hacker mindset of building things and an eye on the business of selling - "make things that people want ... and will buy".
It is obviously true, but it still takes a while getting used to :)
That's the extent of my evaluation. And that's also why I'm not an entrepreneur. :)
There's a definite mismatch between the valuation function I (and a lot of us, I think) use and what the market uses which is addressed by the YC's of the world.
But the bottom line is I don't think pg should misconstrue the confusion (and sometimes frustration) as malice.