I'm surprised the author would be so careless to say things like:
"Most graduate programs in American universities produce a product for which there is no market..."and
"Young people enroll in graduate programs ... all because of the illusory promise of faculty appointments." [Emphasis mine.]What planet is this guy from? What he really means is that in the areas of "religion, politics, history, economics, anthropology, sociology, literature, art, religion and philosophy" (the author's all-encompassing list of the realms of human thought that apparently really matter) it is damned hard to get a decent job after graduate school, and I agree. But this has little to do with the situation in the sciences and engineering, where graduate students go on to a wide range of careers in industry, government, military, and, yes, academia.
I grant that it is possible that we are headed towards a brick wall in these other fields. According to the latest Taulbee survey, Ph.D. production in Computer Science has been skyrocketing, at its highest levels since the survey was started. However, far more students are going into industry than academia. Even for students dead set on a faculty position, many can get a job straight out of graduate school -- postdocs are still the exception rather than the rule. This situation could change, but I'm not sure it's time to end universities as we know them. Religion departments are maybe another matter.