Not creating effective soldiers puts you at a military disadvantage. If Prussia was a major power at the time, surely other countries feared them. If other countries felt it was necessary to stifle their populace in order to ensure that they were capable of defending themselves against Prussia (or to defend themselves against the countries that took after Prussia), perhaps stifling the populace was thought to be a "lesser evil", a sacrifice they justified as part of an arms race.

Maybe this wasn't an evil conspiracy, but a terrible consequence of the prospect of war.

What's the bias for: "Ahh! We're in mortal danger! Quick, everybody, become stupid!"