There have always been douchebags everywhere, but it used to be something that one was ashamed of. If you funded someone like Evan Spiegel, you didn't talk about it. You just pretended that it didn't happen and called it a learning experience. Now, we have a culture that values material success at the expense of all else, isn't really about technology or progress, and views Sean Parker levels of douchebaggery as a positive trait.
The Bay Area used to be for misfits who chose to go off and do their own thing: live among the redwoods, play with circuits and computers, go mountain biking. Now it's full of self-marketers who create the impression that they do all of that stuff, while actually being unimaginative corporate drones even worse than the last generation's kind.
All of that said, Silicon Valley has a long history and it's not going to be ruined forever by a few bad years. If Silicon Valley gets back to a culture of invention, and if we fix the culture by regulating VCs a bit (a start would be to block the anti-competitive back-channelling and social proof checking; we couldn't eradicate all of it de facto but making it illegal would change behaviors enough to give us a chance at fixing the place) it could return to its old promise.
Another thing that Silicon Valley needs to do in order to save its character is fix the cost-of-living issue by crushing some NIMBYs. I think that the federal government needs to step in and crush every anti-development policy, unless there is a legitimate environmental issue.
I sincerely hope that the Valley does survive, because if you take the long view and look over the past 50 years instead of the past 5, you see that it has done more good than bad for the world.