Since my experience is specifically in the US, I can only speak about brands here.

I'll start with the last part first.

Japan and Germany seem to have maintained the highest quality.

The flood of cheap tools and the "pro-sumer" grade tools has had some effect, but they're still the brands that one starts with and replaces over time with better quality.

(Anyone that has worked with combination wrenches every day for years will quickly identify why Snap-on is and has been superior in every small detail)

But the fit, finish, and durability has been sliding for awhile.

Metallurgical reasons for the greatest part.

I have had regular use sockets of multiple sets (multiple drive sizes and applications) crack or shatter more often. Than a decade ago when i was far harder on them.

I've had key components of torque wrenches and socket wrenches faill due to inclusions in key stress areas.

Repeat pawl failures in socket wrenches that replaced pieces that had lasted 3 or four times longer.

To sum up-

A number of factors.

Profitability leading to decreasing metallurgical standards, desirability of lighter designs. Competition with garbage from China.

At the bottom of it,

a shrinking workforce that identifies with quality.