A query from down under: How do our universities *really* compare?

I'm about to graduate in Software Engineering from what would (and does) describe itself as "the leading" university in Australia. I've certainly been happy with the experience - most of the lecturers have been very knowledgeable and reasonably engaging, and the course material has been quite interesting most of the way through. Anyone wanting the opportunity to specialise in whatever field has had the opportunity to do so.

But.

Some of my cohort are, to put it bluntly, awful - awful - software engineers. Working on my final year project this year - a major assessment piece completed in teams of 15 - I've seen so many examples of code that reflect a complete lack of knowledge about, understanding of, or enthusiasm for the craft that you have to wonder why they would choose the field in the first place. It's not just that their technical skills are deficient, either. Broader engineering concepts and supporting processes are also left wanting. One student I worked with - in their final and fourth year of university-level study - had a project group of five people in which only one person understood the idea of version control. Rather than take the time to research and learn about, say, SVN or Git, the group - for the entire year - emailed versions of files between themselves and the group. For a year-long project. It would be funny (and it is) if it wasn't so infuriating. These are students who have chosen to undertake study in Software Engineering (over, say, Computer Science or Information Systems) and yet who, at the end of their degree, are absolutely guaranteed to be virtually useless to any self-respecting company that would like to hire an engineer.

However, before this devolves into a lengthy rant, the main reason I posted this is to ask the following:

> Have those of you who have attended "leading" institutions in your own countries had similar experiences?

I ask because it would be nice to know that it's not just us down here (although it would also be nice to know that it is just us down here).

I'm also interested to know what other people think about the above situation - is it acceptable, or desirable, to have students graduating top-level universities in a technical discipline with a negligible degree of technical skill? There are some obvious points raised by this second question (bad students lower costs for good students, bad students won't be successful in industry), but as this question has become far wordier than intended I'll leave them for discussion :).