I think Denmark and Norway will soon leave us behind just as Switzerland did.
I don't really see that happening. It has been said before, only for Germany to have good tournaments again while the rest had a bad stretch. Even Switzerland hadn't looked all that good not too long ago. Sure, they had the odd surprising result and fared better against the big nations at the Olympics, but apart from last year their World Championship results weren't all that stellar, making the quarterfinals only once in the four years prior.
I see Switzerland slightly ahead of everything that follows. On average they are the closest team to the top, but they will be prone to have bad tournaments again as well. Behind them there are at least six or seven teams who are about on one level, with the usual ups and downs. All of them can make the quarters or get relegated, depending on their form, which varies a lot.
As for the question, Germany still doesn't seem to develop high-end prospects, but the overall level has improved quite a bit. You didn't see a whole lot of Germans among the DEL topscorers just ten years ago. There were usually about two or three Germans in the top 25, and that includes the nationalised players that weren't developed here. In the past three years it has been around 10. Same is true for goalies, there used to be two or three guys who were (at least) part-time starters, now most of the teams have a German no 1.
On average, the players have become much better skaters and have quite a bit more offensive skill. There's still a lack of offense when playing against good teams though, no real go-to guy. The defense is probably the biggest problem. There is a pretty huge gap between the NHL-defenders and the rest. You have a handful of guys, like Braun or Hördler, who are good enough at international level, but it drops off significantly again afterwards. Germany can field about eight or nine good defensemen, anyone beyond that shouldn't play more than a very minor role at a World Championship, as they aren't thinking quick enough and lack any offensive skill. The problem is that most of the time only about half of the good players are available, which makes the defense rather questionable.