I think you're overstating it.
The main reason for the observed phenomenon is that recent works of far lesser quality is being included due to the bias of familiarity.
Think about it, we are talking about approximately 100 books over the the course of over 3000 years of human civilization, which means for any given century you would expect 3-4 works that will make the list. Except you look at this list and get 20 books in the 20th century alone. THe average quality of these works are hence nowhere near the quality of the earlier selections. Which gives the appearance that works of the 20th century are of lesser quality than the works of earlier times. No so, it's just that the nonsense of ages past, unable to withstand the test of time, are largely forgotten with time, as will all the mediocrities on this list from the 20th century.