My favourite anecdote about linux's degradation is this: Earlier, applications like nautilus , cdburner etc would accurately predict and show the amount of time for operations like copy to complete. Moreover, copying stuff via the GUI was not significantly slower than command line.
With the latest versions of KDE (and even gnome), we've gone back to windows98 levels of inconsistencies (seeing the kde time-estimate bar during a file copy is just painful).
If you want a distro which doesnt take 1G of ram to run a filemanager, the latest one you can try is Ubuntu 7.04 - runs much faster on my 6 year old laptop (with 200MB ram) than my modern desktop (with 1G ram).