IT understanding seems to have stepped backwards
You're absolutely right. My guess is that understanding has dropped as a result of increasing complexity. When I was in college you had a modem, that dialed up with a given baud rate. Pretty straightforward. Now you have cable vs fiber vs DSL going into a modem, then a router, some of which are wireless, some require a separate wireless hub. Many different ways of connecting and integrating. Many different protocols. Changing all the time. Who can keep up?
The really good companies, build products that overcome this complexity in a transparent way, so users will get the benefits of modern technology without needing a degree in electrical engineering. Apple comes to mind. They've built an entire company around ease of use. Airport, for example, is a wonderful product that combines router, wireless and tethered connections, and a hard-drive for automatic backups over WiFi. They're expensive, but you get what you pay for, and for people without the desire to learn all about technology, they just work.
Ultimately, I think it's the engineers job to build products that give the layperson access to high tech, without having to know about high tech. And that is a much more difficult job than building something that will work if you set it up just right. That philosophy made Apple the biggest company in the world, and Sonos the biggest company in wireless music streaming. The same philosophy is evident in Naim's Muso line.