The numbers of competitors then was lower than it is now, so it was easier for true talent to stand out.
I happen to have access to a few scattered details of figures-era regionals results, and more data from whole Skating magazines and online post figures, to give a comparison.
A Southwest Pacifics regional competition sometime in the early 1970s (my photocopy doesn't show the year) had the following entries in the lower-level singles events:
7 intermediate men
22 intermediate ladies (8 advanced to the final round)
3 juvenile boys
36 juvenile girls (it seems 12 advanced to a final round and then 4 were eliminated after school figures; Linda Fratianne finished 3rd)
1995 Southwest Pacifics, one of the first years that figures were separated from freestyle in juvenile and intermediate competition but before the effect of the post-whack skating boom would be felt:
6 intermediate men entered in the freeskating competition (4 in the figures competition, 1 who didn't compete freestyle)
35 intermediate ladies freeskating in 3 groups; 12 advanced to final round (19 intermediate ladies figures, 6 who didn't compete free if I've counted correctly)
27juvenile girls freestyle, 8 advanced to final (12 figures, 1 no freestyle)
no juvenile boys that year
2003 SW Pacifics (around the height of post-boom participation; costs similar to today but before IJS)
17 intermediate men
78 intermediate ladies in 5 initial rounds; 20 advanced to short program in 2 groups; 16 advanced to final freeskating
10 juvenile boys
60 juvenile girls in 4 groups; 16 advanced to final
2013 SW Pacifics
7 intermediate men
41 intermediate ladies in 3 groups; 15 advanced to final
6 juvenile boys
55 juvenile girls in 4 groups; 16 advanced to final
(the age limit for juvenile was raised from under-13 to under-14 last year, which explains why there were suddenly more juveniles than intermediates)
I'm sorry I don't have access to more of the earlier data, especially 1980s. Still, I think it's safe to say that total participation now is not lower and probably higher than 30 years ago when Nancy Kerrigan was competing at those levels.
And that doesn't count skaters who are still skating but not on the elite track in the standard disciplines and now have other options to enter USFS-sanctioned competitions (showcase, solo dance, test track) without going to regionals. Skaters with less ice time because of less money might opt for those options these days. In the old days, they would often have just quit.