Well I will argue that they were precisely more media literate because their media literacy applied to a broader spectrum of what was in use and relevant then.

It's a sweeping generalization of course, but many people alive today had some form of media competency taught to them at school. To my mind what is taught at public school forms the base level for society -- the lowest common denominator -- because almost everyone receives it and other forms of education build on top of that. That's how we ensure that everyone knows how to read and has basic numeracy after all.

But media literacy has been geared towards classical print media for the longest time. Because technological progress is so rapid today what you learn in your early years is no longer sufficient to guide you through your entire life in this regard.

Take for example texts, or images generated by artificial intelligence. This wasn't even on educators' minds 30-40 years ago, the lag of implementing new and relevant curricula notwithstanding. For many alive today social networks (today's prime avenue for spreading misinformation) didn't exist when they went to school. Heck, many went through primary socialisation before consumer grade computers were even a thing.

TLDR: media literacy has regressed in the sense that what most people know is geared towards traditional media while digital communications have grown to be very different on continue to evolve still.