I actually met one of the previous Liberal education ministers at a conference once. I made the above point. And surprisingly he agreed with me. And then proceeded to tell me that none of my suggestions were implementable because the middle class would never tolerate a reduction in university admission rates.
Was surprised he was so frank. But I guess that's reality. As a society, we'd rather have more unemployable graduates with faux middle class credentials than actually competent and skilled workers who can draw in great wages.
It's possible if you change societal expectations- university was traditionally seen as a step up from the working class (and their high school degrees), nowadays everyone and their mother literally has a degree which means that the majority of degrees out there are worth little more than the paper they're printed on.
Definitely think the internship program is quite good- even in universities with co-op systems like Waterloo, it makes a huge different in the experience of the graduates.
Would it be possible to shift the system? Difficult (especially against those who benefit from the current system), but possible if carefully planned and advertised as a "German" concept.