If this is true (and I agree with you somewhat) what are the new MFE graduates from Asia and here in the USA doing with their expensive degrees if they can't find a job as quant?
There will, however, always be lucrative jobs for those who are truly brilliant and willing to work on stuff which is kinda boring.
Jane Street still jingles its bells up at MIT, but for those who are less than six stdev's IQ or don't live in NYC / London, I would say focus on petroengineering instead of quant finance. (Petroengineering is the highest paying college major.)
But I suspect it's just like those who finish a law degree and then can't get a (good enough) job in law: not the university's problem, and they're ashamed they ended up in the bottom 50% of their class.