Indeed, the department has changed a bit recently, and the student hacker community is thriving. Theory is still strong, but I would like to add to bwaldrep's point by noting that a few classes are (now) dominated by actually building stuff: in Networks, students build an IRC server, a stripped-down TCP stack, and a rudimentary IP router from scratch; in Operating Systems, students fill in some of the interesting parts of threading, virtual memory, user programs (i.e. implementing system calls), and file system access in the Pintos educational kernel; in Databases, students build a stripped down SQLite-alike database library.
That doesn't necessarily discount your point about frustration, but my impression is that the situation has 'improved' (I'm not one to make normative claims though). In any case, as a math-disinclined hacker, I've been very happy with the courses I've taken.
Aside: I encourage you to drop by a hack night and see what's going on if you find yourself in Chicago on a Friday evening. We love having alums visit and talk about what they are doing!