I'd say that is true for some bands but not all. Pearl Jam has consisted of great musicians since day one. They did some serious music. And that's why they're still here today. Their lyrics have been always been good (minus a few exceptions), Eddie Vedder has a voice to die for (though his voice has suffered a bit lately). And, most importantly, they are still one of the best live bands to date. Yes, their music certainly isn't mainstream any longer, probably hasn't been since 1995. Same goes for Soundgarden or later Audioslave with Chris Cornell. Those are red-blooded musicians. They weren't all "garage bands". Listen to some of Mike McCready's solos. If that guy isn't a master of the art of sound, then I don't know who is.
What annoyed me during the 90s was that practically any band that was associated with the "Grunge" movement and simultaneously was capable of holding a tune and mastering instruments were considered sell-outs and not really grunge.
