I partially disagree. That'd definitely be true to some extent, but I think there's more reasons to dislike bad fiction than it being overshadowed or bad in comparison. If everything was better then there'd be more stuff like cult followings as people realized that the less popular stuff was still good.
Mmm, I'm probably just agreeing with you, here but...
The technical side would improve. There'd be less problems like plot holes/etc. But I still think the majority of what makes people say something is "good" vs "bad" is how it compares to other things. The mere existence of the term "good for its time" more or less proves that, since whatever is "good for its time" is such because it was novel and unique, and the term implies it doesn't stand up to newer things (yet still gets respect).
Compare: The 1940s Superman Cartoons vs Superman the Animated Series (made in the 1990s). I've seen both and I can say that the latter is objectively better. However, which ranks higher on "best cartoons of all time" lists? The 1940s one. If I had watched the Superman cartoons in the 40s, my jaw would've hit the goddamn floor, 'cause they're frickin' amazing compared to the rest of the cartoons of the day, not to mention taking into consideration technical limitations.
Another point to bring up, I suppose, is you can judge something's "quality" by how influential it is. You may or may not like Who Framed Roger Rabbit (most fans of early cartoons don't, so I hear), but it was hugely influential on how cartoons were viewed. It single-handedly put a humungous dent in the animation age ghetto. For that alone, one might call it "good."
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Okay so I caved and watched the first episode of Gravity Falls.
HOLY FUCK THIS IS AWESOME
EDIT:
Link to first episode with some commercials (only linking this one since it has a commercial for Gravity Falls for whatever reason, which may be of interest as it explains the premise):
http://www.youtube.com/watch?v=RE5SzzZOp0s