I agree with your sentiment that college profs should care about teaching, but to be honest too much is asked of them. They're expected to be excellent researchers, inexhaustible grant writers, engaging teachers, inspiring mentors, and part-time entrepreneurs. Those who can achieve 4 of the 5 are still impressive, and more often then not somethings got give.
Quite frankly, I'm fine with this setup. If you want to have a good undergraduate education provided to you by the professors, go to a school where they have that as a priority. If you want to get involved in pushing the boundaries of knowledge, then go to a place like MIT or Stanford and get involved in an undergraduate research program.
1) Professors are responding to institutional and student incentives: institutions reward research, so professors prioritize research over teaching.
2) Students are, for the most part, choosing easier degrees; as a result, those degrees are prospering, and many non-easy disciplines are watering down their criteria to attract remaining students.
3) The only real impetus for change that I can see comes from two areas: a) the amorphous group of employers who want better outcomes—but they have very little leverage and b) graduates who are unhappy to discover they have a great deal of debt and few marketable skills. Again, however, they have little leverage.
But since both place a substantial weight on "graduation rate", the same effect is seen vis-à-vis teaching quality.