Yup.
As a teenager, I mostly listened to radio at home -- either in my room or in the family rec room. Often, I was listening using headphones. In that context, I definitely preferred FM stations that processed their audio as lightly as possible because I could hear the dynamic range and the pumping of tape hiss caused by heavy processing was especially annoying when listening on headphones.
But listening in a car, that lightly processed audio becomes a real pain the rear end because it means I'll be constantly adjusting the volume control.
So logic says that the "right amount" of audio processing is heavily influenced by the environment where your listeners are hearing your station. If you have a bunch of people listening at home, light processing would make sense. I think it is safe to say that today that doesn't describe any significant audience that is left for radio stations. Thus, heavy processing is now pretty common.
That said, it still needs to be done right. I once encountered a station that heavily compressed and clipped their audio. They actually managed to remove the beat from the songs they played. It sounded terrible, and there's really no excuse for it.
