One word ... parents. The primary responsibility for passing on the faith, rests with the parents, not VCII, not homiletics. As I pointed out to another poster, it doesn't take a degree in rocket science to pick up a book and instruct children in their faith. I'll bet the parents are more than eager to provide their kids with iPods, iPads, computer, handheld games ... but when it comes to God, they transfer that responsibility to the church.
The problem is that the parents don’t know it either. Vatican II effectively cut the cord with the past - including Catholic knowledge of the faith.
My oldest child went to Catholic school for exactly one year because the sisters were teaching him such garbage that I couldn’t take it. There was no longer any Faith, any morality, anything a child could understand. They had the kids drawing pictures of butterflies and carving Bibles out of bars of soap (a big Protestant thing, but at least some of the Protestants, back in the 70s, talked about what was in the Bible). My son knew absolutely nothing about the Faith and in fact was quite confused after his experience there, because when he wanted to recite a traditional prayer, the sister made him stop.
So it’s not the parents. Modern parents don’t know enough to even teach their kids, but that’s because Vatican II killed Catholic teaching and Catholic learning.
I agree with your one word analysis: parents.