But the overall number of professional riders is irrelevant All that matters is the top level of 5 or 10 riders competing against each other.
If Pogacar wasn't here Vingegaard and Van Der Poel would have (even more) ridiculous palmares, and even if you've had 180 countries participating in the Tour, it wouldn't mean a thing.
As for the second part, yes, we have more countries, but it seems like the talent pool in some of the traditional countries is shrinking. Meaning that instead of 5 Italians on very high level, we have 1 Italian and 4 more from different countries. And yes, Pogacar may not have been a pro in the 70's, but that certain Belgian or Italian who is a monster talent and would have been a pro in the 70's isn't pro nowadays because cycling isn't as popular (in his country) or he has better things to do in his life. Heck, Merckx could have been software developer nowaday.
Point is, you don't necessarily gain talents in an absolute tern, You may as well just replace 2 Italians with a Dane and Slovenian