I think you’re right and I’d argue that American Idol proves that there is a surplus of talent for labels to choose from, allowing them to be picky in regards to secondary requirements (ethnicity, backstory, work ethic).
But that's beside the point here. My biggest peeve is that there are plenty of "Top 40" "artists" that can barely hold a note. And it's been that way since the 90s, thanks to the magic of Auto-Tune. Anyone with a marketing budget and access to an industry insider who can make the right moves can just start dropping albums and buying hit slots.
What's changed is that now, anyone with a YouTube or Twitch channel can just start publishing music. Create a Soundcloud and you can get rotation in any one of a dozen DJs podcasts. TuneCore will put your stuff in the Music Stores. Spotify and Pandora are a little harder to break into, but not much. Setup a Twitter account and talk directly to your fans without needing a publicist.
A whole industry's worth of Kingmakers have been turned into online services, and that's really changing the landscape of the industry.