Slang has always been around and there have been people saying that the language was dying for centuries. There are concerns about the impact of texting and other such forms of communication on the language ability of some younger people, but I think that slang is not the core of the issue here. I think it's more to do with some of them lacking the ability to create coherent connected texts than the use of slang or abbreviations- slang is a surface issue, while the problem lurk underneath in the mechanics of creating sentences, paragraphs and whole texts.
Also, while there are growing concerns about literacy, and we have got people coming out of our schools illiterate or semi-literate, talking of losing our kids suggests that it is universal and seems over-the-top and sensationalist to me. We could profitably add the tendency for hyperbole and sensationalism that affects much of the media and web discourse to the list of communication issues instead of heaping all the blame on young people.