I think the skill is overall lower.
Doesn’t make sense. Larger pool of athletes and more money to be made. More likely there is increased competitiveness and you’re less likely to have a standout in a division.
You're talking theory, but in reality, its common in combat sports for there to be periods of time in which talent is lower.
K, citing your specifics:
Take many of the divisions in boxing for instance compared to the 70's and 80's.
Boxing was the second most popular sport in America behind baseball in 1950. An amateur golden gloves boxer in Chicago was a big deal. The talent pool has shrunk tremendously. MMA has moved in the opposite direction.
USA Freestyle Wrestling hasn't gotten back to the talent levels of the 80's and 90's yet, though this years world team looks tough.
Super-niche sport where ups and downs are to be expected.
A while back you saw more BJJ world champs, All American wrestlers, stud kickboxers. Now you have guys learning all those arts at an "MMA gym". Specialization is important in sports, but too much in mma creates a generation of crappy wrestle-boxers.
This evolution has happened quickly enough to see what has become of specific pure wrestlers, BJJ'ers, and striking sports. This doesn't make me happy, but it's real. In what I'd expect, Jon Jones and Conor McGregor should not be able to stand and bang with elite striking athletes. Womp womp.
The striking is substantially better than it was, on average. Chuck Liddell was considered a good striker and had the head defense of a totem pole. On the wrestling/grappling side, grappling success is not an indicator of MMA success any more, or Demian Maia and Marcelo Garcia would have won belts.