Weird, we have more division of labor now than ever in history.

You're right, but mistakenly and ironically. Today labor isn't often divided by specialization or task, that would actually be useful and efficient, but often arbitrarily, just so one group of laborers can be pitted against another. That's the modern division of labor, among the 'business' incentives for almost all 'free trade' deals for decades. Elite managements often negotiate to pit workers and industries in different states and countries against each other for their profit, with much work rarely done locally, or even in the west anymore.

our current group of dumb and stupid humans have progressed technology at a pace far exceeding any other time period.

First as swagnarokk pointed out, it isn't the 'dumb and stupid humans' that have driven technological progress, but a very small minority of privileged elites, and even actual inventors themselves are often swindled. Edisons treatment of Tesla is typical. It's hardly new either, Gutenberg got ripped off by his 'business partner', his invention, and all the fruits of his labor was stolen from him. That's the american dream.

Second you quite haphazardly confuse or conflate technological progress with social (and economic) progress, or just ignore it entirely. They are quite different and distinct. Chomsky, Smith and the enlightenment were more about the latter than the former, and largely only appreciated the former for how it could help the latter. How industry and technology could emancipate and educate the masses from their feudal drudgery and servitude. Before the first world war people imagined very short work weeks, and easy work, with as much of the toil and risk removed by the helpful hand of machinery. You may have heard of the worlds fair, they had ideas like these. In retrospect, pipe dreams, and not because of inferior or inadequate technology, but greedy, uncooperative and selfish groups of people, and technology creating more different work. In the words of Gibson

The future is already here – it's just not evenly distributed.

Today people 'futurologists' still persist in the same naively optimistic technological fantasies, as though technology somehow can in and of itself miraculously resolved deep socials divisions and malaise. Despite all the evidence of a century of disappointments and a huge global expansion of industrial servitude, where metropolis style nightmares became common realities. Compared to whats actually happened for the majority of people, it might be better termed a pathological self serving delusion. Corporations inaugurated a new age of drudgery and servitude, wage slavery in factories. Now even those are long closed being exported to cheaper third world countries with cheaper slaves or sometimes automated. Where before women didn't have to work, now most families must rely on at least two bread winners, often with children laboring as early as possible. Women are increasingly pitted against men in labor markets, an innovative assault, introduction labor competition within the family, that feminism seems to overlook. A 'living wage' isn't even important enough to be a ballot issue, in the self styled 'greatest nation on earth'. The middle class is being eviscerated, evaporating back into owners and the owned. Modern capitalists still live off of unnecessary punitive competition and servitude of the lower classes of multiple nations, that's 'progress'. Sure we get to enjoy an ipod, android device or surface. What business is it of ours about suicides in the factories that make them? Maybe we feel good they put up nets. What does the 'pace' of technological progress matter to those who don't benefit from it? Naive fools and dilletantes seem to think smartphones, the internet and computers are some sort of panacea, instead of them being reduced to just some new business opportunity to be commercially exploited and thus abused and debased. If anything it seems likely their ubiquity will just build up a great deal of resentment, if the 'great beast' is not universally surveilled and controlled

I'm going to call bullshit on his speculation, which is rooted in some bizarro world where people apparently decide to do nothing but become dumber with their free time.

What 'free time' do you think most wage slaves have? Most life paycheck to paycheck, working 40+ hours a week if they're extremely lucky (many more or many less if they're not), trying to support families and raise children, be good neighbors and citizens, while keeping a job and staying sane. How many hours a week do you think the lower and middle classes have left after some necessary conventional leisures to devote to self improvement and creativity, not to mention whether or not they have or can afford opportunities? Many people today dream of free time, who will never even get a chance at retirement. Many seniors are working today because they can't afford retirement due to 'big business'. You just ignore the heavy and prohibitive costs of higher education and their increasing inaccessibility as privilege.

So suddenly the division of labor will reverse course? Based on what evidence?

That's a rather pathetic straw man. It's already happened long ago. How many large scale welders and smelters do you think there are in America, compared to say India or China? How many factory workers? Ship yards? Car factories? Electronic manufacturers? On and on. Skills and trades are being lost, simply because they are no longer being practiced or taught. Who needs to know the intricacies of how to make garments if it's done in factory in another country? Who sews much anymore, outside of a Marie Antoinette style artisan mimicking hobby? Those tasks along with their expertise can all be outsourced, and many have been. Who repairs things anymore? Its 'cheaper' to just buy another new cheap version than scour your community to find the dying remnants of a trade in an old tradesman. Everyone in the 'information' economy effectively wants to work in management. Who wants to get their hands dirty in a manual labor job? We'll create, keep and control all the best white collar jobs, but blue collar, those can all eventually go to the cheapest bidders.

It's been over a century since businesses aimed at efficiency, or simply producing good quality products that satisfy social needs. All the businesmen aim for now is (short sighted and ignorant) personal profit, that's 'business culture'. Premature obsolescence is by design. Shoddiness by design. Why make one good shoe that will last decades when you can sell a million cheap shoes that fall apart in a month?

My guess is if Adam Smith lived today, he would change his mind.

This barely scratches the surface and I could go on and on, but instead I'll just say this.

Your guess is woefully, obviously, predictably wrong. Smith would be more appalled by the 'progress' of the modern world than by anything he saw fit to write about in his era. After finishing unfinished works, he could, probably would write a sequel, 'the poverty of nations'. As Chomsky said, you just have to read him.