|MadSci Network: Astronomy|
This is a pretty good question, and if we knew what exactly "dark matter" is, I could give you a really good answer. Instead, there are a number of points to consider, but understand that discussions of dark matter are not yet textbook material... we'll have to positively identify some of the stuff before we can really accurately describe it. (Catch-22.)
We use this phrase "dark matter" but we don't mean to invoke images of something that blocks out light -- rather, we mean matter that doesn't give off it's own light. It's a common misconception that the term refers to, for example, chunks of rock or burnt out stars or other massive bodies that we can't see through. If this were the case, then sure, there would be plenty of obscured lines of sight, and the depth to which we could see in the universe might be limited. But really the term refers more to anything that doesn't give off light, including all sorts of particles travelling at nearly light speed and not blocking any photons. Some of it is probably, for example, particles called neutrinos, which are nearly-massless particles that don't interact with light at all; there are a number of other such types of particles that seem to make up a large fraction of the "dark matter."
Furthermore, without knowing what dark matter is, precisely, or when it formed, you're right: the possibility that there was less of it at earlier epochs does exist. Modern telescopes are just now allowing detailed and quantitative studies of the motions of very distant galaxies -- and it is these motions that imply that there is non-luminous matter present, so hopefully we will get new puzzle pieces in the near future.
Also you have to consider the vastness of space, in terms of volume. We haven't totally ruled out the idea that some fraction of dark matter is in the form of massive bodies, like small dim stars or burnt out stellar cores. But let's say there is a tiny burnt out star at some distance; for the star to totally block a galaxy lying some greater distance behind it, the galaxy must be very far indeed (like, a billion times further). So, the kind of dark matter that not only doesn't emit light but also blocks it actually could only fill a very small volume, and therefore not block all that much. (Neutrinos, by the way, not only don't block light, they don't really interact with matter, so they could zip through planets and stars -- they're notoriously difficult to detect.)
So I'm sorry I can't say anything definitive, but we're still working on figuring out just how much stuff there is that isn't giving off any light... figuring out precisely what it is will be the next step!
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