"But colloquially, the word “hack” seems to have lost its way syntactically. What once stood for elegance and rebellion under the hood of the machine has since taken on a new meaning; namely, in the form of mashups, toys, and even life as a whole. It’s as if for the first time, every problem is an engineering problem."

I don't think the word 'hack' has lost its way, but rather it has expanded its meaning. Every problem is not an engineering problem, but I think that the expansion of the term reflects a cultural change where we are looking at the world around us and ourselves, and seeing (where we didn't before) engineering problems that actually have been there all along. It's a shift in perspective, and without even speaking to whether or not that is a good, bad, or neutral thing, I do think that there are many aspects of our lives and world that are engineering problems that were not looked at this way before.

"Life is not always an engineering problem. Love, happiness, and free will certainly aren’t."

Obviously (to me anyway) life is not always an engineering problem, but happiness often is, by any definition. A patient seeking treatment for clinical depression is the very portrait of 'happiness as an engineering problem'. Outside of the medical field, there are entire industries devoted to 'self help' and improvement of one sort or another. Millions stacked upon millions of people walk into stores, pull a manual off the shelf, and follow instructions on how to attain happiness. I think happiness as an engineering problem is actually a lot more common than it seems at first blush.