We didn't go from Ultima Oline difficulty to modern MMO difficulty overnight. It's been a gradual decrease in difficulty which intentionally or not has brought more players into the market.
When you read forums and find gamers talking about wanting casual MMO's, it's not that gamers have gotten soft, it's that the people saying they want casual MMO's probably wouldn't be having this discussion if it were 1999 because they wouldn't be playing MMO's. There are still plenty of people who want something more challenging. Their voice is just harder to hear in a crowded room.