I suppose it depends which Radio 4 programme you listen to. On the Today programme yesterday, the claim was made that IQ scores have been rising year on year in every country and that someone who passed the 11+ to get a place in a selective grammar school in the 1950s would nowadays be "below average".
Quite simply you cannot compare the exams of previous decades with those today because you would not be comparing like with like. Many people make the mistake of just comparing the examination papers but this is very misleading because there is a whole range of other factors at work, such as the setting of grade boundaries and the effect of coursework.
Having said that, two things about A Levels which have a very important impact on the year on year rise in top grades are:
(i) Before 2000, all A Level exams were taken at the end of the Upper Sixth year (Year 13). Nowadays A Levels are "modular" i.e. split into units. Each unit can be taken and re-taken an unlimited number of times and the student keeps their best result. This undoubtably makes it easier to get higher grades.
(ii) Before 2000, each unit of the A Level was A Level standard. Nowadays, only half the A Level is A Level standard and the other half is the "AS Level", which is a standard half-way between A Level and GCSE. To this extent at least, it it difficult to deny that the A Level has been "dumbed down".
Your other question was how universities can tell who the brightest students are. This is indeed a serious problem for the top universities when over 26% of candidates are getting the top grades. There are a veriety of things they can do, such as:
(i) Looking at GCSE results.
(ii) Looking at actual unit scores (not just the grades).
(iii) Looking at whether or not the applicant has used re-sits.
In addition, an A* grade will be used from next year. However, the top universities still believe that A Levels are not sufficiently stretching the top end of the ability range.