Is the concept of "employee engagement" flawed? In theory, improving business performance by improving engagement makes sense. Yet surveys suggest that since 1991, the workforce is about 30% engaged, 40% disengaged and the remaining 30% actively disengaged, as widely reported by Gallup. http://www.gallup.com/services/178517/state-global-workplace.aspx

Billions are being spent for no result, despite the considerable benefits the engaged enjoy, and the disbenefits suffered by the others. It seems that engaged people are so both at home and work, likewise the disengaged. Neither group seem able to turn it on or off.

Does the failure to improve aggregate employee engagement levels suggest that the concept of employee engagement is flawed?
A few points:


Cut-offs are somewhat arbitrary. Engagement is typically measured using a mulit-item scale. It will generate a scaled response. E.g., there might be 10 items each measured on a 1 to 5 scale. Presumably, Gallup adopts an approach of carving up that scale into categories of engagement. I think they use 12 items from the Gallup Q12; they might be the items listed in Harter et al (2002). Anyway, the main point is that employees will get a score from 1 to 5. If an employee gets a mean of 3.9 on a 1 to 5 scale do we say that they are engaged or neither engaged nor disengaged. If you define 3 as the cutoff for being engaged, then more workers will appear engaged than if you make 4 the cutoff. 
I'm not saying that the cutoff is completely arbitrary. Presumably you could ask managers about what set of responses imply engagement. I had a read of some Gallup material (see here) and I could not find a specification of how these categories are operationalised other than they were based on the 12 items. My main point is that a consulting company could readily choose cutoffs to present a more positive or pessimistic picture of engagement in the workplace if they were so motivated. Furthermore, the choice of items will also influence the means you obtain. If you choose more extreme items, then you'll get lower means (e.g., mean agreement will be lower on items like "I absolutely love my work" than on "I like my job"). 
Self-report measures of engagement correlate extremely highly with job satisfaction. Thus, the entire literature about job satisfaction is relevant. I agree that the construct of engagement has greater linkages with motivation and commitment. However, the survey responses you get pick up on largely the same variance as obtained when measuring job satisfaction. 
Job satisfaction is influenced by personality (Judge et al 2002). So there is a degree of stability that is driven by underlying individual differences. That said, just because group-level means may have remained stable over the years, individuals will change over time in their job satisfaction.
Job satisfaction is related to expectations, and expectations can change over time (e.g., https://en.wikipedia.org/wiki/Expectancy_theory). So for example, if workplaces implement flexible work practices or other initiatives to increase motivation and engagement, then this will be begin to form an expectation. And the absence of these expectations will lead to lower satisfaction. A parallel line of research examining life satisfaction often shows that mean life satisfaction is often around 7.5 out of 10 and that it does not change much over the years as economic conditions have improved. The idea is that there is a homeostatic process related to expectation management and so on that leads to fairly stable scores (Cummins et al 2003). 


Despite all of the above, organisations should still invest in increasing the motivation, satisfaction, and commitment of their staff. Employee opinion surveys also serve a range of useful purposes for organisations. In particular, the provide a more data-driven approach to tracking and understanding the satisfaction-levels of their workplace. Furthermore, there are a range of interventions and strategies that are important for managing engagement, which in turn should influence productivity and retention.

References


Harter, J. K., Schmidt, F. L., &amp; Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis. Journal of applied psychology, 87(2), 268.
Cummins, R. A., Eckersley, R., Pallant, J., Van Vugt, J., &amp; Misajon, R. (2003). Developing a national index of subjective wellbeing: The Australian Unity Wellbeing Index. Social indicators research, 64(2), 159-190.
Judge, T. A., Heller, D., &amp; Mount, M. K. (2002). Five-factor model of personality and job satisfaction: a meta-analysis. Journal of applied psychology, 87(3), 530.