I think this is plausible on the margins, although it could be true that Davidson relative to peers are lower but still overall take the same test they are higher compared to 20 years ago as well (is there some term for people somewhat smarter over time?). Or more specifically `Smart(Davidson Now) < Smart(Peers Now)` could be true, but this doesn't 100% imply `Smart(Davidson Now) < Smart(Davidson 20 years ago)`.
That said, as a professor you take kids as they are, not as you wish them to be. I have only taught at state schools, but if I had to teach the same course at a community college (or an advanced high school) I would likely alter my course/lectures at least some to accomodate the different pupils.
I remember Macro econ was a tough slog when I was an undergrad (it was at 8am). IMO they should do micro as the intro course and leave macro for the majors.