Spot on
If there was a time machine - the modern day City team would utterly destroy the team from 68 for example - I would imagine by double figures. But that is because of improvements in almost everything from training to diet. If the players from 68 were born in the mid 1990s though, there is no reason they wouldn't be much closer to our current team (albeit the fact we have the world to pick from rather than the UK now means todays teams would probably still be better).
In any sport where capability can be objectively measured with the odd individual exception the sport always gets better. The best snooker players or darts players score far heavier than those from years ago, the best athletes are faster and stronger than yesteryear etc etc.