I think that starting with Python is a fine choice. Please keep in mind that it's just the introductory course-- these students are going to be battered with CS theory later on.
We are graduating around 20% fewer students in CS than we were in 2004. We need to find a way to make CS more accessible. I'm not saying that we should make the whole degree easier, but I think that having an easier & more practical first course would be good. The students might not learn as much theory, but they'll get the adrenaline rush of being able to code quickly and do some real damage with their code.
I think the more likely explanation is that a lot of people saw insane fortunes being made from computer science in the dot-com boom and went and got their degrees, hoping to cash in as well. In the subsequent bust, the party was over and computer science reverted to being a program for those who were truly interested in it. I'd rather it stayed that way.
It should be noted that both Stanford and MIT have seen a major recent increase in CS enrollment, MIT in the last academic year, Stanford a bit earlier: http://news.ycombinator.com/item?id=2442274. (CMU caps their annual enrollment at 135 students so isn't useful here ... but interestingly enough, contrary to the others in the top 4 they're moving even more towards instead of away from functional programming...).
Those percentages don't mean much out of context. Was the curriculum less stringent back then (I.e. graduating people that shouldn't have been able to)?
Unfortunately, that context (a survey of the difficulty of curriculums for CS programs across the country, per graduation class) would be very hard to collect.
However, we could try to look at CS school drop-out rates, and how many students picked-up or dropped the CS major. Nevertheless, it would be hard to separate "difficult courses" from "students who don't really love CS" as boit and pnathan suggested.
We are graduating around 20% fewer students in CS than we were in 2004. We need to find a way to make CS more accessible. I'm not saying that we should make the whole degree easier, but I think that having an easier & more practical first course would be good. The students might not learn as much theory, but they'll get the adrenaline rush of being able to code quickly and do some real damage with their code.
## EDIT: It was a 36% drop from 2004 to 2008. Here is my source: http://marketing.dice.com/pdf/Dice_TechTalentCrunch.pdf