I agree, and I think we can already observe the consequences: For example, since exchange traded funds have become more popular, their number increased from 276 to 3.906, and not all of them are passively managed any more. I don't know about the situation in the US, but in Germany, one of the largest direct banks incentivizes buying ETFs that are indexing risky underlying things (for example, one ETF follows the development of pension-funds in emerging markets). It does so by having lower trading costs for incentivized funds.

I think on a private level, one can still find index funds that are actually useful. On a global level, there are some worries that ETFs might contribute to a potential future crisis.