I was around in the 70's, and I recalled the older players had already developed a vocal distaste for the new Fenders being offered at that time. One friend of mine bought a brand new 1975 Strat, sunburst, that didn't play (or sound) particularly good, though I'd love to have a shot at setting it up NOW, lol.
As for the "good ones got played, bad ones went under the bed" scenario, I don't think that's the entire truth. The ones that players NEEDED to play got played, and many got modified... just because it was the beginning of readily available replacement parts, pickups, bridges, etc, to make them "better." But not necessarily effective.
And... I know of a few Fenders that went "under the bed" when the owners went to 'Nam... or died... or moved out of state. Most people aren't that well-versed to make that quick call that this particular instrument was a dog, or not. If they needed to play, they paid a lot of money for 'em... so they played 'em. Maybe they modded them along the way. But an "under the bed" instrument probably got put there due to a life situation change, more likely than a condemnation of it's quality.
Anyone got tennis rackets in the back of the closet? Are they there because they're LOUSY tennis rackets? Or because you simply no longer play tennis?
*golf clap*