It makes me simultaneously feel like an old fogey
     shaking his cane at progress

You're not, you're perceptive. The stuff that has happened to UI will make people of the future react like we do when we hear that this car was considered to be the pinacle of style: http://en.wikipedia.org/wiki/File:Ford.anglia.105e.moors.arp...

Was the world mad?

OSX has somehow pushed everyone (including competing systems) into a state of madness where gaudiness is prized. But phones will encourage sensible interface developments because normal people find them less intimidating and have increased expectations of a clean, powerful, responsive interface.