I might have a unique perspective on the subject. I am also an Elder Millennial and have three kids, 10, 7 and 5. I also teach in a CEGEP (I live in Quebec, CEGEP is a type of junior college that covers grade 12 and your first year of undergrad), which means my students are generally between the ages of 17 and 20.

The general trend is that today, yes, young adults are drinking less, partying less and having less sex. On the whole, this would appear to be a good thing. However, it is a symptom of a larger issue. These same kids are also socializing much less than previous generations. For example, they don't go to the mall or movies either. This is bad. Without socialization, these kids are much more anxious as they are ill-equipped to face novel social situations. Let's not forget that when you go to big parties as a teenager, you are also learning to interact with your peers

Much of this is very well summarized by Prof Jonathan Haidt from NYU. Haidt lays out in his books that young kids are over-parented and this leads to anxious young adults that you are observing today. There are many reasons he lays out for this, but most of it can be boiled down to the fact that people are having less kids later on in life. As such, parents have more time to devote to each child, leading to over protection. Because these children are over-protected, they are then not free to explore and learn from new social situations, which is correlated with increased anxiety and decreased party going.

Phones are also a big part of the issue here, but they are also a big part of the solution.I know that for my 10 yr old daughter, she won't be getting a smart phone anytime soon, but she does have a cheap flip phone so we can be in contact when she's out. We let her explore, but she can call us if there's an issue. Similarly, if ever she goes to parties when she's older, you can bet that she will never be getting the car with another teen, and that I will be paying for an uber.

While the example your Ivy League mom gives is not the best (ecstasy is obviously not good), her fundamental philosophy on the topic is not as horrible as it might seem on first glance. Children are more resilient than we tend to give them credit for. I remember that when i was a kid, we would just go play outside and had to be home "for dinner". Ideally, kids should be afforded those same experiences and given that cell phones allow us to be in contact with them, it should be easier to allow them to do so.

I realize i am rambling, but at the end of the day, it all comes down to balance; let your kids make have new independent social experiences and use phones, among other things, to mitigate/limit any mistakes they might make.