Where is the next generation of warriors coming from? Are we destroying the warrior spirit in our youth?

Relax about the generational change over.
The current generation is cynical about all institutions, they have been raised to expect to be lied to by everyone and based on the current political parties, they are correct. They don't value the hierarchical/rank aspects like many generations before. I tend to see a binomial distribution/two groups: group one is very effective soldiers that are tremendously effective and group two is just enough to hang on.
The culture of the services has not helped as it has shifted to be risk-adverse and put emphasis on meeting all the training and education gates (which is a good thing) and necessarily on how you did on your key leadership positions. (OER and mentorship)
I have seen many effective young soldiers and feel confident they will carry the services when I retire. We have personnel in combat zones but in reality we have very limited actual combat exposure. The true test is when this generation must actually engage the enemy.
My bet is on this generation, they did fine for OIF/OEF and they will be fine for OIR.

When young people arrive here and I tell they, NOT everyone is a winner. When you make a mistake someone could die and there is no reset or save point. A "Warrior Spirit" goes against a PC world because you have to be standing up for something and in a PC World they stand for nothing.

We will always have those people with a warrior spirit. Patton said it correctly Americans love a winner.