Misallocation is a massive problem. A significant amount of money is going into advertising, pointless startups, entertainment and social media.
Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems.
In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than we could possibly need)... So we struggle to allocate capital properly. We just blindly follow trends.
The people who are getting rich now are not those who want to make the world a better place; the winners are those who just want to make quick cash (short-term thinkers who take insane risks).
Does society prefer Snapchat or a cure for cancer? In the current economic environment, investors prefer Snapchat because Snapchat is pretty likely to get a ROI within the next 5 years. The return on investment for a cancer cure is probably small (especially given the large amount of recurring revenue that big pharmaceuticals are currently making by selling cancer drugs). Also, it's much riskier than Snapchat... Could take 5 years, 10 years or 20 years.
Ultimately, we are satisfying people's short-term 'wants' at the expense of their long-term needs.
We're a society of addicts who just want to get a quick buzz.