Rabbi Schwab points out (see 2nd link above) that there were gedolim being created in Germany, perhaps in the same proportion to the East European Jews. It’s just there were far more observant Eastern European Jews, so that the numbers of their gedolim were greater.
He also points out that the large amount of great Rabbis being created in Germany ceased generations before German Jews started going to universities, so one cannot say university attendance was the cause.
Rabbi Schwab states “that the claim that the ‘Frankfurt’ approach was not capable of transforming gifted students into geonim in Torah is erroneous”