I think its true, and I think that its just the way it is. A lot of students I know go to universities that are known to be an easier ride; a school with a less than great reputation.
Thats what the school has to offer. A university is a business, don't get it confused with a service. They do what they need to do to make money. If offering easier courses and more laid back degrees gets students in the system, then thats what they will do. They can only follow the market. If there isn't a demand for a rigorous education, then why set one up?
I don't know why this reminds me of politics, but we call politicians liars, but never elect anyone with an attainable platform. What I'm trying to say is it all comes down to the choices that the students make. And you can't blame universities for lowering their standards.
EDIT: I may have a biased point of view because I come from a fairly prestigious university and am happy with the education I'm receiving.