I mostly agree with this, although I don't think classically trained programmers fare much better on average. I've had many university educated programmers that I've had to teach basic parsing, data structures, and algorithms such as tree traversal.
At the vast majority of even quite decent research universities, CS majors are there to get in, get out, and get a job writing very basic plumbing/form-handling/gluing-stuff-together-code. Or they get an ops job where configuring stuff and keeping it running is important. It works for most of them, too, as that's probably what most programmer-related work is. And most of it doesn't need to scale, so it doesn't hurt too badly that they don't understand algorithmic complexity.
