Well, this is a subject very near and dear to me.
When Drew was first diagnosed with severe ADD, we tried everything we could think of to help him without putting him on medication. I read every book out there, went to parenting seminars, even had Drew seeing a child psychiatrist who specialized in ADD/ADHD. After almoist 2 years, I finally broke down and we put him on Concerta. The difference was immediate! He started getting along better with other kids, his behaviopr improved and his grades came WAY up! Over the past 2 years we have tried different medications and have just gone back to Straterra (the only one he can eat on). With all of the other problems he has been experiencing this year, I hate to think what the poor kid would be going thru if it weren't for the medication.
A year after Ally was born, I finally got help for my PPD. 3 years later the diagnosis has changed to full blown depression. Personally, I HATE taking meds of any kind. But remembering what my life (or lack of it) was like before the meds, I simply can't imagine going back to the way things were. They help me to be ME again, which is better for everyone, especially my kids.
With that said, in the late 80's early 90's I do believe that many children were labled as ADD/ADHD when they probably weren't. It was used as a catch all when they just didn't know what else was wrong with the kids (and adults). So they medicated them. But in the past few years, the diagnosis of ADD/ADHD for children has actually gone down as doctors are better able to diagnose.
Alot of what we see today, as far as medications being over diagnosed, has to do with psychological problems. One of the main reasons you see an increase in this is because of the advance that have been made in understanding how the human brain actually works. There is still so much we don't know. But compared to even 10 years ago, we are leaps and bounds ahead. So you are going to see more people on medication. But you are also seeing more people going to therapy to learn how to deal with things so that they don't HAVE to be on the medication forever. While there are some people, like my best friend, who will never be able to come off their meds, there are many (like me) who will eventually be able to get back to where they used to be with the use of medication and therapy. And the more we learn about the human body and how it works, the more it will seem like more people are being medicated. I believe it is simply a case of keeping up with the advance of science and health. Not to mention that it is much more acceptable now to admit that you may be having some psychological problems. It doesn't mean you are "crazy", which is how many peole used to look at it.
This also goes for antibiotics and just about any other medication you can think of. Look at all the advances they have made in treating illnesses like cancer or Parkinson disease.
So no, I don't think that we as a society are over medicated. I think it is more a matter of there being more knowledge of how our systems work and how we can treat it and the fact that it is more acceptable to be treated so you hear more about it.