there just aren't as many children with developmental disorders these days, making the remaining ones stand out.
I sympathize with your properly seeking to avoid the tinfoil-hat thing. But at the same time, administrator-types will try both of these (opposite) explanations to try to convince you that you're not seeing what you're seeing. Sometimes they're correct, and sometimes they're not. I'm not talking about seeing kids at the mall (there were no malls, now that I think of it). In both periods, I'm talking about families I know or knew in small towns where there's really nowhere to hide your secrets. They didn't have institutionalized children. As I said, we may or may not have a handle on the cause, but I'm seeing more of it, and the observations of others confirm my impression.
Those explanations are not at all opposite. They are different factors contributing to the same observation.
There are fewer developmentally disabled children these days. Because many of the children having easily diagnosable ones (trisomy 13, 18, and 21) are aborted, there is a higher proportion of children having non-trisomy developmental disabilities.
Fewer children being institutionalized means there is a higher likelihood of seeing any child with a developmental disability. Since the proportion of autistic children is higher in that group, there is a higher chance that when you do see a developmentally disabled child, he/she is autistic.
Another factor that I forgot to mention before is the role of random distribution. Clusters can form purely by chance, so you may happen to live in a place where several families with autistic children randomly moved in. Also, is there a school for the developmentally disabled nearby?
There are many possibilities. There is no reason to assume that the incidence of genuine autism has increased, without accounting for all of the other factors.