Great question. Who decides currently?

Nobody? The whole premise is that we should somehow start awarding people for working on important questions which we do not do now.

The usual critique of academia is that people are expected to publish a lot (which creates wrong incentives) and that nobody really accesses quality of the publications (which gives opportunities to cheat). At the same time there is huge PhD overproduction, which creates competition.

I don't think the problem is that people are working on wrong problems, the problem is how they work on problem of their choice and why.

I also don't think there is a simple fix to this problem.