I'm not surprised Michelin hopped on the hawker bandwagon - Street food, with its contributions and influences in the rest of the food world, is simply too important to be ignored.
Having done a food tour of S'pore back in March/April, I sadly came to the same conclusion as your relatives in S'popre. This was my fifth food tour of S'pore, and this trip was the poorest showing by the hawkers as a whole.
Don't get me wrong - There are still hawker gems out there, but I felt, for the most part, that there was less focus in the cooking. The older generation of cooks and hawkers who brought recipes from the old country (wherever that may have been, given S'pore's multicultural society) are retiring, and their kids are not interested in taking over the family business. The newer stall managers often serve weaker versions of the dishes of the former tenants, and there is overall less pride in the preparation and the sourcing.
But not all is lost. To compensate for the slight downturn in hawker fare, there ARE some very bright spots in S'pore's food scene. For one, a new generation of cooks/chefs, perhaps inspired by the various food renaissances going on globally, are venturing into brave new hawker territory. For example, there is a ramen upstart hawker stall serving up great tonkotsu ramen. Additionally, the coffee scene is reverting back to its Straits roots. The bespoke cocktail / speakeasy revolution is definitely in full swing in S'pore as well - One can drink very, very well in this city-state.
Also, another bright spot is that the sit-down restaurant scene in S'pore is better than ever, at all ranges of the price spectrum. The murtabak at the ORIGINAL Zam Zam was absolutely enchanting and transports the diner to another world with its complexity of spice, texture, and tastiness. Izzy's (yes, it's still there), despite having fallen under the proverbial radar, served me one of my finest meals of 2016. The Peranakan cuisine of the Straits is alive and well, represented very ably by the strong cooking at both Blue Ginger and also at Violet Oon at the National Gallery.
Damn. That reminds me - I need to post some of those photos. Off to the photo archives I go...