I think that the standards have indeed lapsed, and I'm apalled at the flying ability of some PPLs. My opinion is that flying schools, being motivated to churn out as many PPLs as possible, are compromising on the quality of instruction. Most worryingly, since they often employ their own examiners, candidates are often passed even though their performance during the test is not up to scratch. One examiner in Scotland (I shall mention no names) has even been known to do the R/T for the student during tests!!! I shan't even get onto the subject of US-based flying schools offering JAA PPLs, surfice to say that some of the worst pilots I have even encountered got their licences in the US.
What we need is a return to good old-fashioned flying clubs that are not constantly chasing profits.