Well, I'm not sure why it's got you so heated up, but there's certainly more than a grain of truth to your rant.
I think that part of the problem is that photography is a very gear-orientated hobby. Sometimes, in the pursuit of gear, we forget that the ultimate goal is to take better pictures, and not just more gear ^_^.
Very few people learn photography by learning the basics and theory first. I started out with a Leica R4E, which is not exactly an 'entry-level' camera (compared to, say, a Spotmatic or Nikon F). However, at least it was a (mostly) completely manual camera that taught me the basics of exposure, shutter speed, aperture, etc.
These days, it's much easier to pick up a DSLR body, and many users never even move it off 'P' mode, so they never learn the relationships between the parameters that determine exposure (it's not rocket science, but it's still a mystery to most lay people). A lot of people don't realise the lenses are more important than the body, so buy a high end body with a sh***y kit zoom on it. It doesn't help that the sales clerks at camera stores are constantly pushing bigger and more expensive models at people.
Case in point: A friend was looking to buy a camera to go on a trip with. I advised him to look at a micro four thirds camera for its size advantages, but when he went to the store, the sales clerk persuaded him to get their latest model, the 550D (a great camera, btw), and two kit zooms, the 18-55 IS and 55-200/4-5.6 IS. Now the model wasn't ready for retail yet, so he'd have to come back in a week to pick it up. So he'd already been persuaded to buy a more expensive model that he couldn't even take home from the store
. But it gets better, he was looking because he was going to go on a holiday, so when the holiday finally came, he packed his DSLR into his (new) camera backpack, got off the plane, and then never took any pictures because the camera was too heavy to carry around
. What did he do? He bought a P&S instead
In my example, at least, this was a clear cut case of a naieve shopper being pushed into a purchase that didn't suit him, because it probably gave the store higher margins. I'm not dissing the 550D, which I think is one of the best midrange DSLRs on the market at the moment, but I knew that it was completely unsuitable for someone who was not an enthusiast, because it is a chore to carry around, especially with multiple lenses.
So there are a lot of clueless people who buy cameras, much in the same way there are lots of clueless people who buy cars, or laptops, or sign mortgages. It doesn't help that in all these cases, there are people trying to sell them things which are not directly beneficial to their needs.
Wind, Sand and Stars.