This is one the reasons I quit as well. Even though work is interesting, the general sense I got was that there are too many players trying to chase the same little pot of gold. Also, it is getting fairly easy to setup a basic execution infrastructure and the barriers to entry have reduced quite substantially as a result.

The good hedge funds are doing extremely well with algos. Graduating students from CS/Math/Stats have a great career here, not to mention the opportunity to do some really interesting work and make a lot of money.