My rule of thumb is that if you pedal with your heels, your leg should be completely straight at the bottom of the pedal stroke. That way, when you are pedaling with your toes, it is about right. Obviously people will want to fine-tune from there, but if everyone was taught that as a basic bit of bicycling knowledge they would enjoy themselves more. And they would go faster, too.

It is amazing walking around my college campus, sometimes I can walk by entire racks full of bikes without seeing an inch of exposed seatpost.