I've been in the Navy now for 16 years and it is no surprise to me that most of our youth are not qualified to join. This article says only 3 out of 10. I think the numbers are slightly less for the other branches of service.
I've got good friends that are recruiters and they tell me all the time what a pain it is. Unfortunately, the Army is hurting the most. We're taking Navy guys right now and sending them to the desert because the Army needs help so bad. Guys who have know nothing but blue water get approx. 2 months of training and go live in the desert tote rifles. Most of the guys are proud to be there and volunteer for it, and the Navy has made it a career enhancing job.
I think there will be relief on the way in the form of this new GI bill. Its called the post 9/11 GI Bill. This thing is head and shoulders above the Montgomery GI bill we had in the past. If you get a chance check it out. Basically, if you do 3 years on active duty you get a full ride to the college or your choice and they pay you a montly stipend to live on!