That is something I've always agreed with. I have respect for someone that goes from undergrad to doctorate, but I certainly have no admiration for them.
During my years in college, a lot of grad and doctorate students would come in and try to help undergrads with their studies, projects, research, senior design projects etc.. What I came to realize is that you can't take what they say too seriously especially when you're aspiring to create something out of the ordinary. For me they weigh too heavily on research, research, research and if you can't validate every single thing you do, then don't do it. I don't agree with that, if you have an idea and think it'll work, do it, and if you execute it properly you will have some degree of success. For me that's the attitude that most of them had. Don't get me wrong, they were extremely intelligent but were too constrained by exact academic procedure and a lot of them had no experience in the real world, let alone the startup world. They would shoot down ideas and make you do ridiculous things for projects, that to me, made no sense and took away time from working on your product. I am not saying those things have no place, but at least from my experience, they weren't terribly interesting people, they were institutionalized by the academic system and didn’t really understand what you were trying to do.
When I say I have no admiration, I don't want to label every PHD that way. They are brilliant people. But for me when you do 4 years as an undergrad, go straight to your Masters in the same school and then to your Doctorate in the same school without anything in between, that doesn't require a lot of determination and resourcefulness. It's a lot easier and less risky to do that than create a startup around a crazy idea and potentially crash and burn. Then again, it might just have been my school.
What I came to realize is that you can't take what they say too seriously especially when you're aspiring to create something out of the ordinary.
I can't comment on your personal experience with grad students (I use grad to mean both Masters and PhD students), but I can say that just like people everywhere else, there is a wide variety of interests and abilities. Just like with job applicants, it's easy to see a sample biased by the "bad" ones. The sampling problem is even worse for grad students, the ones lacking in drive, creativity, or intelligence tend to stick around their programs longer [1]. The only other comment that I'll add is, depending on the program, there probably isn't much incentive to work with undergrads in the capacity you are talking about. So the determined/driven/focused grad students will not do it very much. You may have been steered towards projects because it was closer to what they work on, or would explore a question that they had personal interest in.
do 4 years as an undergrad, go straight to your Masters in the same school and then to your Doctorate in the same school
This is a warning sign. Staying at the same school for undergrad and grad school is called academic inbreeding. If it's a rarity, it's probably a special case that you can ignore (maybe that student was just particularly awesome). If it's common, the program may not be trying hard enough in admissions or perhaps something worse.
In my program, there are many students (including me) that did not go straight through undergrad to grad school.
tl;dr Just like everywhere else, the awesome people move through grad school quickly and the less awesome people tend to stick around. It's more likely that you were encountering the less awesome people.
[1] That's not to say that sticking around a PhD program for more than 5 years is an indication that a person lacks drive, creativity or intelligence. Life happens. Babies, sickness, bad breaks etc..