First paragraph had me laughing. Somebody has spent a lot of time in private industry and has gotten burned a few times.

As for #2 it depends on the age of the industry. Here is the life cycle of research driven industries as I see it.

Historically in research driven industries the foundations have been started in academia. Private companies start up relying on the universities research.

Money flows into the university systems from private companies and they start producing a lot PhD's in the field.

Next the private companies decide they can make more money doing the research in-house. They offer large sums of money to the established professors and get fresh grads at bargain prices.

Pretty soon most of the best and brightest are drained to private industry. The funding from private industry slows to a trickle and all that is left in academia is those with more social connections than ability.

For the next 30 years, private industry has great talent. Then the first first wave of PhD's retire. The new PhD's grads are trained by the social connections crowd.

That's when you start to see fun job descriptions posted like:

PhD + 2 years of experience, Masters + 5 years experience, Bachelor's + 8 years experience.