I'm not sure that Europe is the best barometer. Italy haven't got a single team that look capable of achieving something in either competition. Germany have one in Bayern and to a lesser extent Dortmund that have their own problems. Spain have Barca and Real as usual and then there tends to be a clutch of teams that are capable of performing in Europa League and to an extent in the earlier rounds of the CL.
We have Spurs and Everton who are capable of putting together a good run in the Europa League. Chelsea in the CL and maybe City if they get out of their yearly group of death. The success of the Premiership in CL between 2005-2009 was never going to last.
Chelsea are clearly the stand-out team this year. City should be right up there with them but there is something missing there and it's been the case over the last few years - they seem to lack leadership / ruthlessness / that key ingredient that ensures consistency at a high level. They have a great squad and are capable of competing against anyone when in full flight... but given where they're at, it must be a bit disappointing to have to add caveats.
Then there is Utd and us going through painful transitional periods (I'm still hoping 5 years later that it's a transition with us rather than permanent) and Wenger trying to figure out how to spend big.
As for the quality of the rest of the Prem, I feels like it's gone up. There aren't very many easy games.