The Internet used to be very crappy
If you'd said it used to be less aesthetic I'd agree, but the quality of the internet resource (ignoring AOL and Compulink) was as high, if not higher, than today. What has changed is what's being made available - pretty much any business now has an online presence which wasn't previously the case. Any datasheet you care to name is probably available from somewhere, etc. But these things don't define 'the Internet' any more than Youtube defines video production.
Most sites didn't comply with web standards and would only display properly on either Netscape, or Internet Explorer.
Yeah, one to take up with Microsoft - they are the primary reason for standards not being adhered to, or 'enhanced'.
Insecure Macromedia Flash was widespread and it got worse when IE won the browser war
Yeah, another one to blame on the Internet! Actually, why not just blame to developers of the application instead. But, even better, why not stop with the victim blaming? Think for a moment: once upon a time no-one communications protocols had to think about data that might be corrupted accidentally, or a standard not quite being met. Things worked fine, and if there was a problem, well, shit happens. What made it a big problem and the nightmare we have today was (and are) the fuckwits who think breaking stuff for lulz is fun, or scamming millions of dollars a fair way to make a living, or viciously SWATing a game opponent fair play. They are the ones that made ActiveX a bad move, not the functionality of it per se.