If the "Youth Problem" in Silicon Valley is that there aren't enough useful technologies being developed, then what are considered "real" problems?

Here're a couple of real, tough challenges that could really make a difference: http://en.wikipedia.org/wiki/High_beta_fusion_reactor, and chttp://en.wikipedia.org/wiki/Cellulosic_ethanol. Yes, I know, not nearly as exciting as a fancy thermostat or a cool new app to hook up.

I think your question (as well as the article) may have touched upon a greater theme here, which is that grads are (knowingly or unknowingly) simply "following the money." This is exactly what happened in the early-to-mid 2000's, as Ivy League grads blindly headed to Wall St. I'd say a small fraction were actually interested in finance, while the rest were simply following the herd (or trail of money). Otherwise potentially talented and creative individuals still proved to be human, driven by the invisible hand of capitalism in ultimately choosing a pursuit in life. The reason why a zillion social-location-photo-sharing type apps appeared after Facebook is that the company made its founders a zillion dollars (ok, actually mere billions). It's arguably as simple as that. Given the ROI on many of these fledgeling companies, it's almost hard to blame a recent CS grad for participating in this gold rush of sorts. It's clearly not just grads who are also gravitating toward the consumer web - VC funding has also shifted in that direction. Although the author points out recent grads' desire to be part of  something that's "cool" or among a group of similar individuals, I  think what it amounts to is herd mentality. What's "cool" has simply evolved to accommodate the latest workplace dynamics - for example, was once considered  cool to treat work as work, and instead be a weekend warrior or have a  life outside of work (and not mixing the two). Excessive perks were viewed suspiciously as a way for employers to keep people at work. It's obviously not the case in the present-day startup world. Finally, regarding question of what the "real problems" society needs to tackle through technology, it may be worth mentioning that in spite of all of its problems and waste, one thing government has been good at doing is providing fuel for much of the fundamental research and alternative projects that eventually lead to new technological breakthroughs that society finds useful. Let's hope this continues. Free enterprise is great, but most people end up pursuing short-term opportunistic endeavors (i.e. "follow the money"). Without researchers and smart people excited by partaking in projects that have no immediate monetary benefit in sight, it would be questionable if we ever saw the next big thing emerge. Health care disruptions (through biomedical, IT, & informatics) and energy creation/ usage are two areas that appear to be in "sweet spots" - not immediately clear to grads on how to make money right away, but have huge potential going forward. In all likelihood, the "old guard" (as the article puts it)  of fundamental research-turned-into-ventures will provide the spark in these industries, with the "new guard" of grads eventually gravitating toward these areas once Twitter and its brethren come back down to reality.