I highly recommend you check out Stephen King's NYTessay on the state of the American short story. The essay was about King's wading through the slush pile to find stories for The Best American Short Stories 2007, which he edited.
Here's a brief excerpt from King's essay:
Last year, I read scores of stories that felt ... not quite dead on the page, I won’t go that far, but airless, somehow, and self-referring. These stories felt show-offy rather than entertaining, self-important rather than interesting, guarded and self-conscious rather than gloriously open, and worst of all, written for editors and teachers rather than for readers. The chief reason for all this, I think, is that bottom shelf. It’s tough for writers to write (and editors to edit) when faced with a shrinking audience. Once, in the days of the old Saturday Evening Post, short fiction was a stadium act; now it can barely fill a coffeehouse and often performs in the company of nothing more than an acoustic guitar and a mouth organ. If the stories felt airless, why not? When circulation falters, the air in the room gets stale.
Make sure you check out the comments (which are possibly even more interesting than King's essay itself) here. There's all sorts of pontificating on whether or not the short story is dead or just gasping for air in a culture that no longer seems to appreciate its value.
There are plenty of comments on writing programs since King all but disses them in his essay, which got me thinking about a reading I recently attended, featuring MFA alum Steve Almond.
Almond had a question about how he learned to write. And he answered that the most valuable thing he got from his MFA was getting the chance to work on the campus literary magazine. He said going through the slush pile and reading what writers consistently do wrong is what really taught him to write.
Anyway, just a little something to think about.