Yes, I heard this ridiculous statement many times while I was there.
I agree that it is said because Witnesses cannot defend their beliefs but they are not going anywhere. This is their social club. They are in the religion to stay and it would not matter how ridiculous it all got. Sadly, it is really too late for the elderly to start over and I feel badly for them.
As other posters have said, non-JWs in many cases are just as moral if not more so than many Witnesses. I was raised a Catholic and knew quite a few die-hards whose morality and "purity" rivaled that of any Witness - without any of the craziness.
Sad to say, I would have to say Witnesses are not what they are cracked up to be and their "goodness" in some cases is just hype - that they started.
I have noticed Witnesses have skewed definitions of honesty and lying. They are filled with hypocrisy and arrogance and this is not just a cliche. It is BAD.
I will take the moral non-Witness any day.