I heard of this idea from Reb Akiva Eiger, never from the Arizal. But I must say, don’t think the street or the common man was so holy in those, or in any, days.
One thing is more in our generation: we are, or we feel, a part of the world outside us. There have been good times, but now we are completely a part of it, especially in New York, where we are just one minority among many others.
There is also a very big Nesayon of Kfira, general and pointed. But this is not the first time and probably not the worst.