Well in Monaco's qualifying the differences between drivers of the same team were 0,5s in Red Bull, 0,4s in Ferrari, 1,1 in Mercedes 0.4 Renault. I don't think that is as huge difference as you make it sound like it but yes, the differences between drivers have gotten smaller. If in 80's or 90's someone was faster than everyone else by a second I believe that was called dominance back then too.
Also it's been proved in sports on many occasions that you don't need to start 4 years old to be good at something. As a kid you just need to do all kinds of sports. Yes, motorsports is started younger and younger but that doesn't for certain make the drivers better when they're adults. The skill level that it takes to get far in motorsports has gotten higher due to increased amount of people interested in motorsports but the skill level of the best drivers hasn't gotten much better.
Drs has failed in my opinion since it's used in other things as passing too. And when you have many people driving behind each other's only the second one gets the advantage over the one in front of him. Also the passing is too easy and no more is it exciting to see someone pass since as long as you have long straight you don't need skill since you can just push the drs button if you're close enough and go past the other driver. Where is the skill? You only need to be fast on clear track and you can get past anyone in 90% of the races as long as you get about 0.5 seconds close to them.
Pirelli's tyres have been a great success and affect in the quality of racing much more and make the races fun to watch. Since everyone has worn tires in the end you never know what's going to happen if they are close enough.