Nice handle, oddly appropriate in this case. Do you even have any contact with children?
(Don't answer that - it was rhetorical and I don't really want to know. Ask yourself what kind of kids you interact with and decide for yourself.)
Granted, helicopter parents may totally funnel children into too much structured activity, but there are still lots of kids that have plenty of creativity. I don't see any problem with crayons yet, or Play-Doh, as long as the situation keeps kids from the sort of one-upmanship that would preclude it. If one older kid brings a DS or a PSP with him to a group, it can distract kids from playing with the simple stuff for a while. On the other hand, if that's what the group is doing, (crayons or clay or even blocks!) I've yet to see a real shortage of creativity. My oldest can be a problem for the a similar reason - he's almost always got a Bionicle or two with him, and not a spec, out-of-the-package one. Most of his Bionicles are borrowing heads and weapons from other guys, changed color schemes, extra weapons built with standard LEGO or Technic parts, or hybrids.
If you doubt the creativity of kids, try listening to them. I hope you will be pleasantly surprised, or maybe you have a bunch of dumbbells in your neighborhood.
As far as the parents go - parents that play video games are probably still in the minority. Most of the parents that my wife and I know IRL watch a lot of "Big Brother" and "American Idol" and "Brooke Knows Best" and "Dancing with the Geico Cavemen Spectacular". Most of my serious video game playing adult friends fall into the "Kids? I haven't found a spouse I can tolerate yet!" category. I didn't count people who only played Wii sports for two hours at a party.
Another thing that strikes me is that you can't have a class of 20-30 kids in school and expect all of them to whip out dogs in a spaceship to the moon or a cow with wheels on it with their 8-pack of Crayolas. Some kids aren't going to be at the same place intellectually, some kids aren't going to have the same cultural context, some kids are only going to draw pictures about stuff they learned in Sunday school because their parents won't let them watch TV or play with the heathens next door, some kids don't read and will only generate TV related imagery, and so on. Kids are creative, but they're not all going to be at the same place - and I'm basing a lot of this on my own formative crayon time in the 70's. This is not a new problem. Do you suppose that James Naismith and Johannes Gutenberg had to listen to crap from city leaders about how basketball was keeping kids from being creative when playing outside with a ball and the printing press kept kids from embellishing their folk tales and oral history?