General reply from reading post for 2 minutes (sorry.. I should have taken more time.. I know, pm me if you want me to read more thoroughly):
Yes, changes are happening.
Independent learning is an OK way of learning, but I think that classroom learning is actually a lot more useful. This is especially the case for higher maths in a way that 1st and possibly 2nd year don't illustrate. I learnt some group theory in high school using a book, and it was the same concepts as Algebra I which I did in uni. However, I got hugely more out of the course, mainly because 1) I had to do work to retain the information and 2) the lecturer presented it in an accessible, interesting way. Despite books being the repository of much mathematical information, live teachers do the job much much better...
About letting more students do the course: The courses are HARD. There's no two ways about it... I found in algebra I and II some of the most intellectually demanding subjects I've ever done. I got lost in a few points, and basically ahd to go back and work stuff out on my own. This is the first, and so far only, time, I've had to do this with regard to some piece of logic. Relaxing standards and reducing the content covered in the course will mean that less is taught... and when you get worse students coming in the lecturers tailor the course to be easier... hence the good students don't learn as much.
The people who ARE doing algebra I and II, in my humble opinion, are probably most of the people who SHOULD be doing the course...