When I hear "dumbed down", I dont think of people, but what they did to X mechanic. You could argue that the graphics were dumbed down. Not to appeal to idiots, or whatever, but becasue consoles couldn't handle it. You could obviously use a better word than DD, but I knew what he meant.
You knew what he meant because the meaning, as with so many words, has been misconstrued and then widely spread because people just don't care if it really means something different than what one would think based on its usage. For example, take the widespread misuse of the phrase "couldn't care less"... which means someone simply could not care any less as they care as little as possible, already, and are no more able to be any less caring as they've hit the lowest bar in the caring rating system. For whatever reason, people use the phrase "could care less" to try and convey a "couldn't care less" meaning... but "could care less" literally and directly means the exact opposite of "couldn't care less" and people say it without actually knowing what they're saying, regardless. "Dumbed-down" in its modern, improper usage still does directly insinuate that something is dumber, or less intelligent, than something else.
That is what it means and when people see that phrase over and over again, they associate it with what it's being used to describe... hence we reach the stereotype (that you all know exists if you've been on the internet for more than a few days) that consoles are dumber platforms for dumber people... and I still stick to my point of capable PCs still being even weaker... hence I can play Crysis on my own crappy laptop at a playable rate because the PC version does, no matter what anyone tries to ignore, feature lower settings... low enough that even my laptop, which is far less capable than my PS3 or a 360. Since that is the case, why does nobody call the PC settings or the laptop I'm playing on "dumbed-down"? The reason is because it's a PC... and the term "dumbed-down" and its correlating mentality have made certain people susceptible to the belief that PCs and anyone who plays on them are more intelligent.