I'm not sure about your theories and reasons, but I can agree that bike shop repair persons do seem less competent than in the past. I do a lot of my own wrenching more because I enjoy it than because of any philosophy. However, within the last three months I had three problems at the bike shop to which I have been going.
The first is having changed the brake levers and installed new brake cable and housing on one bike, they incorrectly adjusted the brake pads by toe-ing out rather than toe-ing in. I pointed it out when I picked up the bike, but the service guy insisted he was right. The brakes barely stopped the bike on my own test ride, and I had to correct it myself.
Same shop overhauled a cup and cone fixed gear hub with new grease and ball bearings. When I picked it up, it turned more roughly than when I had brought it in. I was then told the cups may have been pitted. When I asked why I had not been contacted as to whether I wanted to replace the cups, I got no response. I don't think he knew the condition of the cups but was just looking for an excuse for how rough the hub adjustment was. It's a bit of an art to tighten cones to the right tightness, but it's not like painting the Mona Lisa. I was able to adjust it to be usable but not at my standards, and I got rid of it.
Last and most recently I had my shop install new Kool Stop brake pads on a bike with cantilever brakes, with which I've little experience. They installed them but were adjusted so loosely that when the lever was squeezed fully it came within a couple of millimeters of the handlebar grip. I took the bike for a test ride, and the pads barely stopped the bike. Only after doing my own research on the Kool Stop website did I understand that the pads were on backwards, despite there being obvious directional arrows on the pads. I brought it back and they reinstalled them but the tension on the brake cable was still off, and I had to finish the job myself at home.
That's it. Strike three. You're out. Now I've got to find another shop and hope it is better.
I've often been told that if I want to avoid disappointment that I should lower my standards, but do I have to lower them to the point of accepting incompetence?