Right….I am 100% certain now that this is data related. I’ve fired up my PC again and started a VFR flight and ironically, for the very first time, have been presented with this abomination.
I am now seeing exactly what you’re talking about. That is that the game is not streaming the Bing data correctly, and the terrain is blurry and seriously lacking detail. The AI buildings (non-photogrammetry) are bland, generic, and also lacking detail. The World Map was also very very slow to load in and lacking detail. I’m on a 1GB connection so it is definitely at the Microsoft side of things.
If this is what you’ve been seeing all the time then no wonder you feel they’ve downgraded the graphics. I promise you though, this is not how the game looks. This is as it is even though all the data options in the sim are turned on. I’ve cycled it on and off, changed servers etc. but it makes no difference.
Without doubt something is properly wrong with the servers. These server related issues happen far too often. It is unacceptable that they are this sketchy and it is NOT good enough for this to keep happening. For a game that relies almost entirely on streamed data these servers need to be bullet proof. 
