To elaborate on lapcat's point, you have to look at this from the point-of-view of a young, would-be aspiring literary fiction writer. From that vantage, it doesn't matter what the steady state of English/MFA professorships is, all that matters is your ability/chances to get one of those stable
professorships. And the odds are very, very low, because lots of new PhDs are being produced, the turnover on those jobs is tiny (they are very comfortable positions, and there are few other job opportunities that use the same skills), and ~no new jobs of that kind are being created. Even if you get into a top-tier PhD program, chances are you will never get a tenure-track position, much less achieve tenure. You will either scrape by on a series of poorly-paid, labor intensive adjunct teaching positions, or abandon academia.
This is all very well-documented, search for "humanities phd job crisis" and you will find lots of information, e.g. [0].
Isn't it just math? How many PhD students are "minted" by a professor over their career? A very crude estimate is between 10 and 50. For each PhD to get a professorship, each generation the number of jobs would have to multiply by that number. Does anyone believe that can be possible? If not, you will end up with a "crisis" like this, regardless of the best of intentions or evil influences or whatever. I mean of course if you kept 10x-ing the available jobs, at some point the supply of students would thin out but probably only at a huge number.
