I'm with the "The competitiveness is the same, the individuals are better" school of thought. I personally know people who train naturally with nothing more than a good work ethic and diet. They plateau, then start some basic supplements available to you and I at GNC or VitaminWorld or wherever, and then manage to lose another 3-4% body fat and gain another 20-30 pounds of muscle.
The playing field is still level as it has ever been, but there's no way that the athletes of yesteryear are even close to being the same physical specimens that we have today.