I think specialization is a "necessary evil" for a field such as physics. The general field of physics now encompasses so much information that it is impossible for one to be adequately trained in all areas of the science. As a result, one has to pick and choose a smaller subfield of physics to specialize in. Because the breadth and depth of the content of physics has exceeded the amount of information a human can assimilate in their formal education, we have no choice but to specialize. It's the same reason why bureaucracies form: the task is too big to be managed by a central unit, so in order to provide any order at all, the task must be divided and managed by subunits. Sadly, it is simply no longer possible for great physicists of the day to be like the giants of old, who were adequately trained in all the physics that was known at the time and were able to push the fronts on all sides. And Chris is right in this too, that because we are specialized communication infrastructure becomes crucial. Physicists have to dialogue across subfields; we need to have biophysicists working, or at least conversing, with medical physicists and solid state physicists and everything else.
This topic is especially frustrating for me personally: I'm a senior getting ready to apply to graduate programs and facing the prospect of having to choose a subfield. I want to study all of physics, but it simply isn't possible in the time I have. The prospect of having to pick a subfield, almost arbitrarily, it seems, is not a happy one for me.