The first sentence is largely a normative claim.
The second sentence is an objective claim (though without a baseline). And it seems to me to be false.
The eye test suggests to me that the players today are better than they were 40 years ago. A lot of this is easily explainable: the increased discipline and professionalism of the athletes, the huge improvements in development programs, the internationalization of the sport (from the NHL perspective), and the advancements in equipment.
But let's go past the eye test with easily explainable rationales. (I did this about 15 years ago on Canucks Central when it was hosted by rivals (is that right?) and again about the time of the Central migration to Canucks Corner (can't recall which board)). Let's get mathy and seize on a constant: the number of Canadian players in the NHL.
In 1980, according to Elite Prospects, 82.2% of the league was Canadians. 21 teams, lets assume for simplicity that each year there were 25 players per team (which is low, I am sure, but the only issue in this analysis is whether the number of players who play per team has meaningfully changed in 40 years). That's 432 Canadians playing in the league.
Obviously, the end of the Cold War opened up the floodgates to Russians, other soviet republics, and the Eastern bloc. With it came an infusion of Russians, Czechs, and Slovaks so that in 2000, these players made for 18.6% of the league's players. (In 1990, the number of Russians were negligible, though we all knew that from the 70s until collapse the USSR produced elite players and Canada was the USSR's only peer). This infusion in the 1990s couples nicely with the NHL's expansion to San Jose, Tampa, Ottawa, Miami, and Anaheim (early 90s) and then later Nashville, Atlanta, Minnesota, and Columbus at the end of the century.
In part because of the big money available in Russia's oligarchy and in part because of higher cultural costs to being in North America (as compared to, say, Swedes, who are by this time universally english speakers b/c of swedish education reinforced by english speaking media and entertainment), the former soviet and eastern bloc contributions to the NHL would decline after that apex. But it would be more that made up for by significant growth and improvement in Swedish hockey, Finnish hockey, and *dramatic* improvement in USA hockey with the creation of the USNTDP, the development of the USHL as a real juniors league, the abandonment of high school hockey for elite players, and, yes, the expanded interest in the sport that coupled NHL early 90s expansion.
By 2017, only 45.9% of NHL players were Canadians. 32 teams. Assuming 25 players per team, the number of Canadians in the league *declined*, and not by just a little. Using the 25 player per team estimate, there were 367 players in the league. (One might say its more accurate to assume an average of 30 players per team per season, but that does nothing to the point being illustrated).
In 1980, the 430th best Canadian player was in the NHL. Today, that player is not.
To argue the league is watered down is to make at least one of two claims -- one, Canadians are, in absolute terms, worse at hockey than they used to be. Two, that the league was already watered down in 1980.
The first claim isn't all that plausible given that while Canadian hockey has declined in relative terms, it is also far more professionalized. To be sure, perhaps fewer people are playing because of the costs associated with the sport. But Canada's population has also increased by 50% during this period. And those costs of participation? They are going up everywhere. And it was the USSR that dominated the world juniors in 1970s, were the best teams in the 1980s. It was the 1990s and 2000s that saw Canada dominate juniors, before the past decade where juniors success has been spread among the top 5 (Canada, USA, Russia, Sweden, Finland). The point is that in 2010, when Canadians made up 52.8% of a 30 team NHL (396 players under the 25 player per team assumption), Canada was riding historic WJC successes and those were the ages players on 2010 NHL teams.
To the second claim -- the NHL was already watered down in 1980 -- I don't know what it means to be "ideal". Of course if we spread out today's NHL players across 24 teams -- getting rid of all of the 4th liners in the league (presuming an even distribution today of all 4th liners), and all of the 6-7 defensemen (and sending many #5s to the press box), and basically all the crap starting goalies, the quality of play will improve. This is especially so given that the market suggests that there isn't a ton of difference between 4th liners and tweeners in terms of contributions to wins and losses. But that's not an interesting observation. To claim something is watered down, we still need to pick a point in time that the water supposedly got added. (And lest you accuse me of cherry picking, in 1990, when there were still 21 teams in the league, USA hockey was starting its upswing, and european scouting was a regular part of an NHL franchise, Canadians made up 74% of the league, 389 players under my 25 per team assumption -- still greater than the number today).
Bottom line -- the NHL is not watered down. That doesn't answer the question of whether the league should expand. It does answer the argument that the league shouldn't expand because the quality of play is getting worse due to talent dilution.
Source for nationalities: https://www.bardown.com/fascinating-nhl ... s-1.894809