Absolutely true. In fact, a funny effect that happens is as the show goes on it becomes increasingly jarring when they use flashbacks to earlier episodes because the juxtaposition between the ever-improving art and the genuinely ugly episode art becomes ever-increasingly disparate!

That said, regarding it starting in 1999, while I agree on the time capsule aspect, I have point out that as a 40yr old man who has been watching anime since single-digit age, One Piece was indisputably ugly even by 1999 standards. By this point we already had Cowboy Bebop, Neon Genesis Evangelion, Rurouni Kenshin, Ghost in the Shell... Hell, I think Love Hina came out the following year and in terms of appearance it absolutely blows the first 100 episodes of One Piece out of the water, no contest.

So yes, One Piece is a cool time capsule to see how an artist can grow and develop over time, but I'd hesitate to call it an accurate time capsule reflective of anime as a whole.