“but even so, internal links can’t account for very much where pagerank is concerned.”
They are absolutely vital. They are by far more important than any external links, except the single most important external link you have.
“It goes against the concept of a link being an authority vouching for another.”
On the contrary, it is absolutely central to the authority concept. Linking is page to page, not to a site, so if your main page gets a link from CNN or whereever, that is usually (but not always) an affirmation of the content of your domain, not just the linked to page. You then link to your internal pages, passing along part of the CNN vote to the internal pages you consider important.
“Google engineers are smart enough to realize that an authority vouching for itself is to be expected and not worth much…”
Not true. They are smart enough to understand that the authority of alberteinstein.com doesn’t end at its main page. External links/PR just tell the search engine that you deserve to cast votes for yourself (and others).
Lots of webmasters squander pagerank because they don’t understand that PR makes no distinction at all between “external” and “internal”. A link is a link (in terms of PR).