I think part of what has happened is a group of people has identified that a lot of modern writing is garbage, but doesn't know exactly what's wrong with it. The issue gets blamed on whatever seems like the most obvious change to them. There are some stories with better writing that have a diverse set of characters, and while there are still weirdos on the internet that complain about it, the general market response suggests people are most interested in good media, and good media can represent a diverse range of people.

As for my take on modern writing, I think "design by committee", by means of publishers and marketing specialists grasping more control over the creative process is the major culprit in its declining quality.