BTW, if it feels like I am being somewhat picky or arbitrary it's that I can see the reasonableness of both of the following statements.
Thus I'm sort of having to point out specifics such as "for a Tytalus Titanoi" or how your saga treats access to specialized skills versus focusing on a few magi and a few companions for anything considered important (+ a few shield grogs thrown in)
It's the part I bolded that makes all the difference. Essentially, in your sagas, anyone with "specialized" mundane knowledge must be a companion (or a magus), so specialized mundane knowledge is much rarer and thus "precious" - enough that it makes a lot of sense even for magi to take it.
I guess this lends sagas a different, much more "really dark ages" feeling: reading or even blacksmithing is a rare thing that makes a character really special. A feeling I like! Closer to that of 3rd and 2nd edition: do you remember when magi were magi and copied their own Art summae? 
A like to whomever recognizes the paraphrased quote above!
Well, grogs can't be specialists in stuff (mostly supernatural) requiring Major Virtues, Confidence, or more than 3 Virtue point. But yes, by and large, mechanically it pays off to have grog specialists. After all, in ArM5 the idea is that
Indeed, and the answer is usually "not nearly as much as what those xp would give you if spent on Arts, Masteries, Finesse etc.".
Just to jump in here, I can see the case for restricting academic abilities to companions or specialists paid for with build points. You don't get a teacher unless you specifically pay the BPs for a teacher.
The exception would be Covenants in Universities or Monasteries.
Why yes; most of my ArM play and all of my in person play was in 1st and 2nd edition (mostly 2nd).
Not quite but sort of. Actually the bit you say is a fundemental ArM5 idea is pretty close to my thought and liking.
To me anything specialized and story important should be at least a companion. Sure a grog can be a blacksmith, or a literate friar who hangs out near the covenant but by making that person a grog you are declaring that for game purposes they aren't that important.
That's a good point. If your group buys an academic specialist with BP it does feel more warranted.
Well, any non-magus PC who is story-important should be a companion, whether specialized or not. That's a basic tenet of Ars Magica. But let's not confuse cause and effect.
If you assume that the "average" covenant has a number of specialists who fade in the background (as Arm5 does) then by default specialists are not intrinsically story-important and thus can be grogs. So if you want a hired academic who, meh, just serves as the covenant's astronomer and occasional teacher of Latin, Artes Liberales, and Philosophiae to magi but is not otherwise story-important ... you can certainly make one as a grog.
That would feel a bit weird if you didn't at the same time do it for Arcane and Supernatural Abilities too. In which case sure, your sagas do get a feeling that's much more "dark ages, when ignorance rules!" as mentioned before.
The average scribe will produce less than 40 books in their lifetime. Universities read books allowed so that students can transcribe what was said. Hate to say it but the literacy rate is very low before the printing press (though it is increasing in this period).
Would the astronomer exist in the saga if they were not a part time teacher of Latin, Artes Liberales, and Philosophiae? Would they have been stated out or would they simply be a line item like the not special in any way baker? With the fact that downtime seasons are built into ArM as part of the story of the magi and the covenant I hesitate to say anything that significantly effects the seasonal plans and XP of magi is specifically always story important.
That also gives at least a bit of support to not worrying about arcane and supernatural abilities as much as they normally only show up in adventures or as adventure hooks and thus are not effecting the broad story of the magi and covenant in the same fashion.
We're getting too far afield really. I don't want to sway you to my opinion because it really is an opinion. I can see your side, appreciate it, and willingly game in that mindset but it isn't my favorite.
AFAICS the "impoverished Baccalaureus of great intellect and learning" isn't exactly a figure of 13th century tales. Impoverished vagrant students are as Goliards - but the authors of the satires around them appear to be mainly established clergy themselves.
Still, if one wishes magi in a saga to study Academic Abilities at their covenant, there is the possibility to bring in a vagrant goliardic teacher. He can indeed be a very colorful companion. Designing him as a grog with just a Baccalaureus Virtue for 90 additional xp in Latin and Artes Liberales significantly limits both his story potential and his use as a teacher. In such a case, just putting some academic books desired by the magi into the covenant library is a far more direct and open approach. Priscian's Institutiones Grammaticae or Donatus's Ars Maior alone go a long way here and should not be too hard to get for many covenants.
As @SteveD intends to publish, he better not use corner cases of character and covenant generation rules unless he really needs them.