Yes, it really is possible to have too much education. Not just in the sense of the absent minded professor either (as the saying goes, the more educated you become you know more and more about less and less until as a senior professor you know everything about nothing).

It is entirely possible for both an individual to have too much education and for a society to be educating too many people too highly:

The oversupply of college graduates started in 1999 when Chinese leaders decided to counter some of the effects of the Asian financial crisis by boosting university enrollments. They had hoped that a generation of well-heeled educated urbanites would boost domestic consumption and help reduce China's dependence on exports. Enrollment rose quickly, from 3% of college-age students in the 1980s to 20% today......Some 6.1 million graduates entered the job market this summer, 540,000 more than last year. In 2008 the employment rate for graduates was less than 70%. This year nearly two million of graduates, many of them postgraduate diploma holders, are expected to be left without job placements......An explosive report released by the Chinese Academy of Social Sciences (CASS) in September said earnings of graduates were now at par and even lower than those of migrant laborers.

That has to be a blow, the highly educated scions of the urban middle classes are valued at less (for their labour at least) than the peasants just in from the fields. Yes, education itself is valuable and life enhancing, but this idea that we should push as many as possible through the universities simply does not make economic sense. Our own experience in the UK is that trying to get 50% of all to have a degree is, well, it's already been reported that an Arts degree for a man is not cost effective, it detracts from lifetime income. It's one thing to say that education is good (as I've said it is, as part of personal development) but this mania that it will be the economic salvation of us is nonsense.

For us to take people out of the workforce for three years, at great expense to both themselves and the taxpayer, simply doesn't work as part of economic development. We are actually destroying value, not building it, by doing so.

As is so often true the American vernacular seems to have recognised this long before the policy makers (how about that for the wisdom of the crowds?). One discussion on the correct form for the plural of Starbuck's barista (baristae? baristas? baristi?) ended with the sage observation that it was in fact "liberal arts graduates".