In the first season she wasn't book-smart but wasn't dumb. In season 1, episode 8 she fixes a problem with Cotton Hill's car on her own in a way that implies she is mechanically inclined and competent. She got dumber as the seasons went on. So did Peggy Hill. So did Dale and Bill. Hank didn't really become dumb but he was seriously Flanderized by way of his love affair with propane.
I have seen many characters in different comedies get dumber over subsequent seasons. Presumably this is because it's easier to wring comedy from people making bad decisions. Even Malcolm in the Middle -- a series centered around a boy with an in-show IQ of 165 -- had Malcolm making absolutely stupid decisions in the later seasons.
