The 'problems' described here are actually the mechanisms of why SV works.
Yes, there are lots 'me too' startups out there. However, in any thriving ecosystem there will be a trend toward replicating success, and rabid competition.
Furthermore, these startups don't represent the vision of where the founder wants to take the company, but just a miniature vs of the startup for what is possible today with the small amount of resources they have.
As these startups gain traction, their vision will expand, and their innovation will as well. Some will die off, and a few outliers will emerge. Not every company becomes Facebook or Google, it's logically impossible for every startup to be an outlier.