If you're never taught how to learn, how do you learn it?
I think that the education system is lkely better at teaching now - but the way they teach is worse. The expectation in the past was that a student was expected to learn - now, nothing is expected of them. They are pandered and catered to - by parent and society.
The environment you are observing is a bit different though, isn't it? The older generations went through real hardship, real war, real atrocity - they weren't damaged by someone getting their pronoun wrong.
I also don't think that Gen-Z has the most psychological issues, but that the stigma of addressing those is finally disappearing and treatment is actually encouraged.
Yes - for better and worse. Youth of today are old-hands at psychological talk, because they have been therapized since toddlers - well intentioned or not, it has made many of them oversensitive to what they should barely feel. They are like adults who have grown up on a bland diet and had their first taste of a mild chili meal. Sweating the small stuff.
Again, not for the sake of being better in itself, but to be better for the system.
Perhaps this is hand in hand though? If we aren't being better, how can we make a better society. And if we don't make a better society, how can we be better? This degradation down to the lowest common denominator means we are constantly going to keep degrading.