Even still, I'll have students emailing me for more work. They want to do research, get involved in competitions, write a paper, do independent studies. Every semester I have to approve overloads for students who want to take more classes. Individual institutions aren't forcing these students (who are often the most qualified of the qualified) to take on all this extra work. It's more like, the whole system is a race to the top for them. It's hard to disentangle that drive from industry and the economic system and blame it just on academia. After all, why do they want to take these extra classes? To be better job applicants.
The idea being a hyper-competitive environment creates pyrrhic victories where even the winners are less well off. Your last sentence leaves the impression that those students aren't doing it for love of the work but only as a means to an end.
Exploitation of youthful passion for profit is basically the centerpiece of how America beats its workers into submission and slowly breaks down their expectations for anything good in the workplace. The worse condition the workers are willing to accept, the more profit to be made off of their labor.
I don't think there's a conspiracy. High performers in "passion" fields are sought after and make bank (Tom Cruise vs starving actor, eg)
The problem is the oversupply of middling talent. If I needed a random average actor for something, there are thousands of them fighting for the job, so it doesn't pay much. If I need Tom Cruise I am going to pay a lot.
The passion lense is useless. Doctors are passionate. Engineers are passionate.
The difference is the bar to entry. Getting into and graduating med school is very hard. Very few people, relatively, have an MD so they are in demand. And failure is clean - if you didn't make it to medschool, you go do something else. You don't spend the rest of your life as an "aspiring physician"
There's no such filter for acting etc so lots of people flood the field, don't get a natural weed-out and thus spend the rest of their life competing with each other for mediocre opportunities. And we just don't have a shortage of actors.
The US system is provides a practical signal. If you aren't making it on your "passion field", at some point the money signals that you can contribute better to society elsewhere.