And you are doing a great service to the 45% that previously wouldn't have had the chance of higher education, giving them the opportunity to improve themselves and be the best that they can be.
Where's the downsides?
Well, I'm not sure that swapping three years of experience in their chosen vocation and the income and freedom that come with it for three years racking up debts that will burden them for many years afterwards, all on the promise that their degree in some artificial subject will somehow improve their long term prospects, is really doing anyone any favours. I'm all for supporting education for education's sake, and for everyone being educated to the highest standard they are willing and able to reach; I'm not talking about that here. What I'm talking about is pushing young people who could have been successful in another vocation down an academic track paved with false promises.
I think your claim about people going on to do PhDs is unrealistic, too, FWIW, but let's not get bogged down in that one.
Back on the topic of schools, kids now work harder than we ever did at school, and come out knowing more than we did.
Do they? Really? I don't know how old you are or what generation of exams you took yourself, but I was taking GCSEs a couple of decades ago. Looking at the way things have changed, sure, it's good to get past rote learning of facts or recitals of works that ten seconds on their smartphones could find for them. But a lot of the new material that has replaced that rote learning seems to be little more than vague waffle about ill-defined subjects.
I don't see any signs that kids are developing better mathematical aptitude, only that too many seem to need calculators to do basic arithmetic these days and don't notice obvious errors in results because they seem to have little intuition -- very much the opposite to the claimed changes. Do kids today really spend more time in labs conducting the basic experiments that formed the foundation of today's scientific understanding? Have they gained a better ability to construct a logical argument in maths or write persuasively in English? Do they speak foreign languages with basic conversational fluency and confidence when they go abroad on holiday? Are they aware of pivotal events in history, how they happened, and the lessons we can learn from them? To me, all of these things would be valuable alternatives to rote learning, but none of the school age kids I know give the impression that they're significantly better off in these respects than your or I would have been in our day.
So while we're in complete agreement about the value of teaching kids to think and research, it seems we might disagree on how effectively these things have been learned under the systems of the past few years, and perhaps I also feel that more textbook knowledge is still useful than you would argue, simply on the basis that without context and examples and a general knowledge of the field it's tough to know where to start. What use is Wikipedia, if you have no idea that a relevant topic exists or what to search for to find it?