I have to say, I'm usually quite skeptical when I hear a newspaper reporting that someone is saying such things about education standards. I'm just not sure how much room I should allow for deliberate or accidental misquoting (and this isn't a particular DM jibe - the British press seems to do it quite often). Personally, although I was privately educated so it doesn't mean much, AOG's description of what was covered topic-wise in education sounds very familiar to me (though we hardly had any Religious Education)...
My first response to the question was that I'd much rather children be equipped with the skills and means to find work/succeed and (most importantly) be happy in life rather than necessarily leave school with a vast amount of obligatory general knowledge (and certainly in the field of history, a fair chunk of what's deemed 'general knowledge' often turns out to be wrong anyway). But having read the thread I suppose that isn't really what you're saying.
Personally, I'm not really convinced that, say, one child not knowing who Churchill was is symptomatic of anything really toxic - it just indicates that there's a kid somewhere who's really really uninterested in history. Sad perhaps, but not really a crisis. I'd be far more worried if the systematic, peer-reviewed, carefully-handled research carried out into education was coming to the same conclusions as this article. I don't know a great deal about that, unfortunately, which kind of bars me from saying much more on the topic, but as far as I'm aware it isn't coming to the same conclusions by a long stretch.