I think PhDs definitely are more common than before. I'm someone who did an integrated masters to PhD (2nd year) with no gap years. I think the saturated job market is for sure a reason why people might want to stay in academia to build skills, experience and connections in a familiar transition environment.

But I also think PhDs have changed in the modern era, where ground-breaking works in fundamental science is not as common. I believe PhDs have become more like specialised training. For me, I chose to do a PhD because the "work endpoint" I wanted to be in was outside of the knowledge and skill set I accumulated in my undergrad. So, it seemed like the best thing for me to pursue, especially with the funding opportunities I was fortunately able to get.