Great question!
There has not been a significant change to the ratings formula that would introduce 'ratings inflation', which is the shorthand term for the situation you describe.
However, the USATT rating system is not, completely, a 'zero-sum' equation, and over time there is a tendency for ratings to creep upward. I'll describe one example of this in a moment.
In Canada, the ratings system is deliberately inflationary, and points won and lost in a match are not neccessarily equal. The Canadian thinking is that this encourages p_layer_s to stay tournament active with no fear of loss of prestige if they lose a few matches.
In the US, adjustments can happen. Say that a p_layer_ arted 1700 has a good day, and beats one 2000 p_layer_, loses to 2 other 2000 p_layer_s. In his two losses, no points are exchanged because the rating differential is so steep. His 2000 level win, however, results in a 50 rating point loss to his opponent and a 50 rating point gain for the victor. Very straightforward.
But...

If that 1700 p_layer_ beats all three 2000 level p_layer_s, its assumed he is not really 1700. His rating is adjusted upward to nearly 2000 and the results reprocessed. Now his opponents all lose 8 points apiece and he gains 24. This is done to protect higher rated p_layer_s from being beaten by extremely under-rated opponents. But the net result, over many years, is for the total number of points in the system to increase, and a slight inflationary increase.
So in my opinion, you elder friend is correct. 2000 is not quite what it was 20 years ago. As a relative measure, between currently active p_layer_s, its very accurate. As a means of comparing 1980 to 2005, its not entirely reliable.
Alan