Well you also have to remember that companies came and went faster than startups did. And consolidation happened quite quickly as well. Engineers made cool things but only a handful of the companies found a hit, and rarely did the same company consistently find the best. What ended up happening is the bigger companies just started buying the small company that had the hit that year. The old model was no more sustainable than the current model.
Companies now trust marketing/sales boys to know the market better than the very people who made that industry.
In sixties, a CEO comes to an engineer and asks what will be the "next bug thing" in one year term.
Today, a CEO comes to an engineer and tells him what will be the "next bug thing" in one year term.