Humanities departments continue to operate with a vocational tilt that made sense in the 1950s (heyday of the GI Bill!) training students to earn Ph.D.s and become professors of the humanities at other, rapidly expanding institutions of higher learning themselves. In this model, which persists today, students learn the current cadences of academic writing. That is its own art form, which is fascinatingly different from all other types of writing -- and generally pretty unsuited to everyday use.
This hasn't worked out so well lately, because faculty job openings in the humanities are far scarcer than the supply of new graduates. So students hoping to make it all the way to a professorship end up stuck. As Prof. Schmidt notes in his piece, it's possible for humanities graduates to find good careers in the mainstream economy, but there are a lot of jitters about how to do so.
What's probably fueling this student anxiety (and a desire to avoid pursuing humanities majors) is an apprehension that the faculty is unfamiliar with career paths other than chasing a Ph.D. and trying to earn a faculty position somewhere.
It's actually quite striking how many anthro majors find their way to UX; English majors succeed in sales, etc. But there's no support from faculty to get there. And while understaffed career-services departments do the best they can, learning how to get here from there is much harder than it should be.
Humanities education made a lot more sense when the subject of the humanities was believed to exist. Then there'd be reason to have many openings for humanities professors, spin off education jobs in public education, private education, etc.
You're right that without any aesthetic sense, everything gets bleak. Are things that dire, though? With the business media getting obsessed about unicorns, $1T market caps, etc., it's easy to believe that money fever has infected everyone. It hasn't. Friends who teach, make movies, deliver social services, write, etc. are still keeping some sense of goodness alive.
Why bother reasoning from our intuitions about what we want when we could just pursue our subconscious goals directly? Who needs to be convinced that they want a product to be good-quality?
Many people, apparently.
If anyone was willing to do it, "this painting is beautiful," could be put on exactly the same footing as "this drug cures clinical depression."
Aren't there still as many, if not more, elites than there were last century? I think a much more realistic picture is that both the sciences and the humanities benefited from the GI bill and grew massively, but the sciences "left the house and earned their paycheck" while the humanities remained reliant on teaching. Now that the demand for education is not growing so fast in and of itself, the sciences have kept up the pace by recruiting support from industry while the humanities have had to face the music.
1. Subjectivity to preserve the values of goodness, truth and beauty
2. Deny such values exist
However, the humanities are predicated on the objective existence of these values, which is denied by either option. Thus, the acceptance of materialism necessarily kills the humanities.