You're not out of touch with the technically-inclined. That's not the majority of people. Everything you describe w/ incredulity is what I see, in some part, the majority of non-technical people people doing. They usually have a phone as their primary computing device, too, which further erodes the concept of owning your data (and of files, for that matter).
Sure they did. Seemed like everyone had a laptop with oodles of malware, popups, browser toolbars and it took 5 or 10 minutes just to open iTunes or Winamp. Loads of techs had a lucrative, but annoying sideline decrapifying laptops - or just annoying with relatives and friends. Then they'd install Kazaa again and be back to square one. :)
If you said 20 or 25 years ago I'd agree, but 15 years ago is a different beast entirely. My ludite mother, who finally got a smartphone _this year_, had already come to terms with needing to know how to use her computer including transferring files to flash drives
