Living in Germany, I have the opposite observation: Good grades these days seem to be handed out (too) freely - the other day I again had a college-entry-level student who did not know essential stuff (in this case: no idea about basic history), even though he had an A- average (13/15 points) in his Abitur diploma.

This may be me getting old and starting to have strong, rose-tinted memories, but I am sure many who get good grades today would have been close to failing only twenty short years ago.