I agree and disagree at the same time.
I believe that in general it is easy to say yes customer service is worse now than ever, however I can point to several examples of businesses and services I use that go way beyond what any business in the past would have considered doing.
In major high street stores i believe there has been a decline in customer service despite many having better returns and customer service policies than before. It's a bit of a paradox really, by becoming more professional and customer focused in their customer services policies they seem to have lost that personal touch which makes us (the customer) feel that the service they provide is worse than before.
Online of course is a different matter, with absolute shining examples of customer service are places like Amazon and others. Conversely there are also some terrible examples online I personally have experienced! One of the biggest, most aggressively advertised web hosts I can think of provide not only a sub standard product but appalling customer service. Perhaps spending too much money on promotional models leave them short in the customer service department, of course this is based on my experience. Due to this I moved to a different, much smaller web host that provides me direct contact with support from a Principal as well as being flexible with the services they provide me making a much more satisfying and less 'packaged' experience.
So in summary I would say customer service has not really declined but OMG we really miss 'personal service'.
Feel fee to ask if you want the name of my fab web hosting company - not too many of you though, I don't want it to lose the 'personal service' :)