[I am apologizing in advance for the length of this rambling discussion. Consider the passion a compliment to your writing...]
I finally had a chance to read your entire speech on the Web tonight. I'd heard the jist of it when you gave the original, but I was sobered to put the issue in the context of Derek de Solla Price's work.
It's appropriate, too, that I came across this link the night before the Big Interview with Boston Consulting Group.
1) "The best an brightest leaving science" Well, that's exactly what's about to happen isn't it? Undergraduates going into management consulting was unheard of at Caltech & science students until barely two or three years ago, I think.
2) "Exponential growth cannot go on" Computer Science is just discovering this. Not that you need to hear any more hosannahs for the theory, but it's been the talk of the field since 1990 that we're not founding any more CS departments, that PhDs are being forced into _high school_ teaching, &c...
3) Scientific Elites within Scientific Elites. An unexplored consequence of the mining and sorting process is the judgement passed between schools. Looking through the brochures of the top ten CS graduate departments, the faculty is almost exclusively filled with graduates of the other 9. As science shrinks, you stated peer review will weaken; departmental elitism will surely increase, virulently.
4) Current Strategies. Well, for those of us in the pipeline, we're aware of the risks, and I think Caltech, at least, is doing a better job of preparing us for non-academic-research-careers. I am ready for this new world; I am ready for so many different careers, I have a dozen offers in four separate fields. Work for Smart People is getting better and better, as the income and achievement disparities between upper and lower increases. (the 80's: flat means, skyrocketing variance)
5) BUT! But.... what about MY chance to take part in Science (with a capital S)? I'm twenty, with a BS from Caltech in Economics, ENAS, and possibly an MS in Computer Science, with a 3.7, four years of research experience, and I'm not going to get into CS graduate school. I have known since, well, the very beginning, that I was going to do Research, have a Big Idea, and join the three generations of Dr. Khares. And that world, as you said, no longer exists.
Thus, I make my closing point about the wholesale changes to the social structure of science you alluded to. If Science goes as Science is, what of Research? I, for example, have some clear research ideas that go beyond what any one (necessarily) nearsighted software company would fund. It's not a product; I haven't even the scientific discipline to enunciate what it is yet (Catch-22). Perhaps the future calls only for ever more-stringent sorting and polishing -- but what, indeed, will come of the well-taught man or woman's ability to interact with Science?
PS. Precisely what kind of Golden Rolodex do they keep at _Science_, anyway? Scarce a month goes by without a quotable tidbit from Caltech's Vice-Provost... :-)