I don’t think it has become as bad as the picture you have painted.
Google has always ranked SERPs based on relevance. There are many web pages with great content but poorly optimized for relevance. It is easy to outrank such pages by doing just a bit better on relevance.
Backlinks play a role in influencing relevance and they can often compensate for poorly optimized content. Google doesn’t really try to judge the quality of content, only the relevance and link popularity. They do a very good job of this and I don’t see anyone that has rivaled their competence in this regard.
It’s not their fault if a webmaster has done a poor job of clarifying the relevant keywords for otherwise great content. Those pages have to compensate with extra targeted promotional efforts or languish in obscurity. Google does their part, but they can’t be expected to compensate for lack of effort on the part of the content creator.