The pictures taken on my iPhone 7 camera have low resolution and a grainy quality. I don’t remember it always being like this.
While you may have uncovered a new Apple feature that digitally simulates the effects of aging of analog film and prints — I doubt it.
It is fairly common for people to switch their cameras to low resolution, forget about it, then wonder why their pictures are grainy and why no one in group pictures is recognizable.
Also, as Tetsujin comments, you may have "Optimize [device] Storage" switched on, which will migrate the high quality images to iCloud and leave low-quality versions on your local device. See Get help with your iCloud Photo Library.
Google Photos may also be a culprit. I am not sure how it works on iPhones, but on Android devices, after backing up to Google's servers, it has the ability to delete originals from the phone, leaving only thumbnails behind.
If you are looking at old photos and wondering why they appear more grainy than you remember, you are likely experiencing Recall Bias. People tend to remember things as better, worse, or just plain different from what really happened. For instance, Our Brains Rewrite Our Memories, Putting Present In The Past.
Eyewitness testimony is notoriously unreliable.
Malcolm Gladwell has a couple episodes about memory on Revisionist History:
Not really enough information to go off here, but if you're viewing old photos you may be viewing cached images from iCloud which are lower resolution so that the thumbnails can appear faster on your device. If you haven't got a decent internet connection you won't be able to download the full resolution version when viewing it, or there may be a noticeable delay in the amount of time the full resolution version takes to appear.