In practice, the trope is (mostly) based on a fallacy - the examination of the object (car, building, ship, radio, firearm) from the point of view and according to the needs and values of the modern man or woman, ignoring the social context in which they were made.
A common example: the all glamorous, awash with chrome, glittering like a Christmas tree classic car. For a modern person, it's far too easily to dismiss a Camry or a Jetta as plastic junk by comparison when set near a '33 Pierce-Arrow, a '57 Chevy or a '68 Mustang GT. The most sensible question to be asked is: modern people can afford plastic junk which runs twice as fast, with four times the mileage - but could the same man, living in '57 and having roughly the same career as today if possible, afford the classic? Practice says it's not quite so, as even people who were alive back then can tell. Getting a V8 Chevrolet in 1957 was a great investment, while having a Pierce-Arrow in 1933 meant you're at least a millionaire businessman. Common people in 1933 had to do with some Model T or Chevy Stovebolt, if they could afford a car at all. Even closer to modern days, in the gilded age of muscle cars and having the mass production techniques at your side, Bullitt's Mustang V8 was an unaffordable dream, most people had to do with some proletarian 170ci / 200ci sluggish basic model. Even Bill Clinton, who had been a successful lawyer back then.
Or take the Older Than Television Mauser 98 - an 1890s vintage design still in production. Robust enough for pieces of World War I vintage to still fire accurately, machined from heavy steel, deeply blued, with strong walnut furniture. How many hunters and other civilians could afford to buy one from new in its heyday? Even modern day mass produced clones run in the $1000 range, with rounds $1-2 apiece.
The modern counterpart of the glamorous '33 Pierce-Arrow is not the modern Jetta or Camry. It's the breathtakingly expensive and just as untouchable for common people Rolls-Royce Wraith or Bugatti Veyron.
So it's not quite the case of the past having best technology, but more like the economy has evolved enough and each man's wealth grew enough as moderns could afford nowadays things which people in their recent past could not.
The argument changes however when it comes to the reliability of an object, in which there is a grain of truth within this trope due to the appearence of the (in)famous "throw away culture" in the last decades.
As mass production became more widespread, the focus of the industry changed from making artefacts that could last for several years to ones that were of lesser quality and that would make the client eventually come back to buy another.
While in theory this can be sustained in an industrialised, First World society due to the increase of wealth of each individual, this is not true for those that live in the Third World, where things like cars or electronics are already a life investment and where it's encouraged to preserve what one can buy and save money for any eventuality such as an accident or an illness.