>How does that make sense? If the supply is decreasing and competition for it simultaneously increasing, how does that make it less valuable (even in the cynical view of the PhD as a commodity)?

A degree is a commodity. The education behind it might be less so. I don't see it as cynical. The funding system requires a PhD, which confers a type of value on the degree. As you describe, yes, funding is currently very valuable, the degree has become less so.

>As I mentioned in my earlier comment, unless the PhD in question scammed the system (it happens), it at least proves that they have the focus to go deep. It's not a double implication though, which is what people seem to forget and then go on hyperbolic rants.

It doesn't necessarily require a scam. For example, sometimes the candidate of an advisor that is not very involved, but brings a lot of money and/or reputation, can slip through without proper scrutiny. Sometimes the committee is dysfunctional. There are many reasons why it happens.