"More stunning, said the comprehensive 101-page report: " 70 percent of today's youth are not fit to serve in the military due to obesity or being overweight, criminal records, drug misuse or educational deficits."

That is not the problem at all, the main issue is the politicians who pass legislation blocking the military from taking and making these people fit.
Lard-asses can be made to do PT if they won't lose weight on their own; CCF can be used to reinforce military standards on those who like to act like they are "back on the block or want to use drugs". 
"Educational deficits"? I quit school because it was boring. 6 months at my permanent duty station and I was sent to the education center to  and tested out for a HS diploma.  I retired 23 years later. Some  "educational deficit". More like some staff-O wanting a bullet on his peacetime Army OER by using a piece of paper as a metric.