I'm 36, so I worry about this. But I think younger developers really are better because technology changes so quickly and they've had more free time recently. When I was in college, I'd stay up until 3 AM "hacking". I got really good at all the latest stuff. Now I work 40+ a week on what is now older technology (because if it's working, don't "fix" it). I have a family and house and all sorts of other time sucks that mean I simply can't "hack" until 3 AM on a regular basis. Some of my experience means I'll make better decisions than the wet-behind-the-ears crowd. And it also means I can probably learn new technology faster, despite my less-squishy grey matter. But even at a faster clip, the huge advantage in time a college kid smart enough to not need to study much has means he or she will simply be better at the latest technology than I can possibly hope to be. And the quick turnover in technology means the value of my knowledge is falling quickly while the value of the young guys knowledge is on the rise. He or she will get a job and a family and be in the same boat soon enough. But the claim that my "experience" is somehow universal and timeless is simply a load of crap. In technology, experience is an ever-fleeting thing.
That's why the guys who jump ship every few years do so well. They jump not just for higher salaries, but for the opportunity to learn the latest technology on the job before their existing knowledge becomes so completely useless that they can't get a new job.
To an employer, they have their best employees jumping ship frequently and see the just-out-of-school kids with a working knowledge of the technology they're moving towards. You can almost not blame them for crying about a broken labor market. Almost.
But employers know all this. Since technology changes quickly, they HAVE to train someone -- either their existing (read "expensive") employees have to learn new technology or some new hire (read "cheap") who knows the new technology has to learn the deeper engineering things that one gains only through experience. Since they're going to have to pay someone to learn something either way, who can blame them for choosing the cheaper option. Sometimes us old dogs would have done it better and cheaper, but its a risk and we all usually take the less risky option.
I'm not sure I have a solution to all this, but we need some system that encourages those of us with experience to help the young guys learn the timeless things and also gives us free time to learn the ever-changing things. Maybe an apprentice system like they have in Germany or something.
What's NOT the solution is importing cheap, disposable labor from overseas and then shipping them back home when their expertise is no longer the latest and greatest. That does nothing but help the rich get richer at the expense of both US and foreign workers.