You are absolutely right about the hand-typed ms. slowing things down! Part of the problem is how easy it is to produce a short story or novel. Computers and word processing make it a snap to revise and edit. Electronic submissions mean you can send it off with only a few keystrokes and at no cost to yourself. And if you get tired of dealing with rejections, well, self-publishing is getting easier and easier, too. Result? A mosh pit. Musical chairs in a football stadium with only three seats. Many of the big publishing houses refuse to deal with electronic submissions, insisting on snail mailed mss. This weeds out a lot of the casual submissions.
And yes, I think you are also right about the attitudes of children brought up with "Yes you can! You are wonderful!" It's very difficult to criticize this emphasis on self-esteem without sounding like a jerk who hates children. But the fact is, no, they can't all grow up and achieve their dreams, and encouraging them to dream big ensures that most of them will be in for major disappointments when reality sets in. In the meantime, being brought up to think they are, for example, talented writers with a unique voice, even if they are only competent writers with an occasional good idea, in other words, not unusual at all, convinces them that they are genius waiting to be discovered.