But then, I wonder sometimes if it less that the fanfic is going downhill than that I've just gotten too picking. I want what I want nowadays -- specific characters, specific characterization of those characters, specific genres -- and I have a hard time settling for less.

I would say it's a little bit of both but I think in the end pickiness ends up on top. There's this progression when you first start out in a fandom, where you begin with no expectations and no clear idea of how you view the show and characters (and, in the case of reading, no real expectations except whether or not it satisfies a particular craving), but then the more fic you read, the more you write, and the more you watch the show, the more you start to figure out where you stand - on certain characters, certain episodes, the show itself and quality of writing.

Hope that made sense.