Average article quality is almost certainly going down, but the main driving force is probably mass-creation of stub articles about villages in Eastern Europe, plant genera, etc. Of course, editors are probably spread mpre thinly even among important topics as well. A lot of people seem to place the blame for any and all of Wikipedia's problems on bureaucracy, but as a regular editor such criticisms often seem foreign, like they're talking about a totally different website. True, there's a lot of formalities, but they're mostly invisible, and a reasonably intelligent person can probably pick up the important customs quite quickly. In the past 6 months of relatively regular editing, I can't say I remember ever interacting involuntarily with any kind of bureaucratic process or individual (I occasionally putter around the deletion nominations for fun, but that's just to satisfy my need for conflict). Writing an article (for example), especially if it's any good, is virtually never going to get you ensnared in some kind of Kafkaesque editorial process. Such things seem to operate mainly for the benefit of people who enjoy inflicting such things on each other (e.g., descending hierarchies of committees for dealing with mod drama).

It's late, so hopefully the above makes some modicum of sense.