I went to college at 17 but was just as lost and clueless as could be. I wish that somebody had sat me down and asked me the following:
What is your values system?
What kind of responsibilties do you have to yourself? To your family? Community? The world?
What can you see in the world that needs to be done?
What can you do to make the world into the kind of place that you want it to be?
...I guess that whole "be the change you want to see in the world" ethos. It would have helped me get some clarity about what to study in school and what kind of skills I should be trying to acquire, to sort out the difference between what I like
doing and what I could do that would give me a deep sense of satisfaction and feeling that my work is of value to other people.
If he doesn't have a paid job, maybe you could insist that he go out and volunteer his time and that you will credit him $8 dollars an hour so that he has to work off his rent outside the house doing something useful, even if it's not remunerative. He can also work off the $60/month karate fee if he isn't going to the dojo to use it anymore.
If he is interested in woodworking, see if he can find a person with whom he can intern or work for part-time to see if he's REALLY interested in it before he commits to going to school to learn it as a trade. Same for the martial arts equipment idea.
If he wants to travel, Habitat for Humanity
and other NGOs have volunteer opportunities in foreign countries - maybe he would like to go to Haiti or Mexico and build houses for a month.
If he is playing video games and sitting around the house all day, it a recipe for angst, torpor, and depression (BTDT). I really think they do something bad to the brain.
Final thoughts - I had a boyfriend who was a somewhat aimless young man. His mother sent him on an Outward Bound
trip that included a lot of hiking in rough terrain with no possibility of bathing, team- and trust-building activities, and a solo experience, where each person in the group was left in a wilderness location for 24 hours with no contact from anyone else in the group. Though it was not a panacea, I think this experience had a pretty profound effect on him and his confidence in his ability to rely on himself.
Re: getting him off his a$$, I think sitting him down to write up and sign a rental agreement, like he would have to sign if he had anyone else as a landlord, would be a way for you all to set out expectations about his responsibilities and the consequences for not holding up his end of whatever deal you strike. For awhile, that might include him getting up to go to work at the same time as you and DH, even if his work is helping little kids learn to read at the local elementary school or doing hospice home visits with 90 year olds. Then stick with it.
As for being picky about jobs, as my mean ol' grandma would say, "Beggars can't be choosers." In Grown-Up Town, sometimes we take a job that isn't our dream job so that we have the resources to eat and keep a roof over our heads while we search for a job that we would like better. He's 19 and has a high school diploma - what kind of hotshot job does he think he will be getting? There's no shame in retail, food service, physical labor, or custodial services, and whatever he finds is not his forever job. I think an unfulfilling job can also be a great motivator to find something you do want to do.