Doesn't the expansion of the universe really just mean that the speed of light is decreasing?

Red shift is evidence of an expanding universe. According to your vague idea, light from distant universes would simply get here faster, rather than having their wavelengths shifted.

Plus the speed of light has been measured locally to a very high accuracy and is not changing.

You miss understand the expansion. The universe, not the objects within it, is expanding. It is like pouring water into a pool while people and objects are floating within the water of the pool. While the water would be expanding to fill the pool area, the peopl and the objects within it would not be expanding. The most that the things within the water or space would do it drift with the expansion.

Shrinking is not capacitiy of time. Time is the measure of the motion of energy. Thus, time reveals that energy is always in motion. Time does not necessarily move forward but simply moves or even oscillates. There is no such thing as the arrow of time in reality. We perceive it as moving forward because of our concept of the past, present and the future in our brains.

Your yardstick is held together by atomic forces. The expansion of the universe occurs a distances in which the expansion rate overcomes all other forces. Your reasoning is therefore missing a few key elements.

The speed of light is always 'c' (using local clocks and rulers), and this fact has nothing at all to do to do with universal expansion as other posters have already remarked.

It is important how you measure and define the speed of light - the speed of light is equal to 'c' only when you measure it over short distances using local clocks and rulers. Some other ratios of distance to time in cosmological situation might not be equal to c, but these discrepancies can usually be attributed to the curvature of space-time. Curvature effects are more complicated to talk about and describe, and are dealt with in General relativity.

However, it is necessary to understand SR well before one can move on to GR. In a small area of space-time, curvature effects can be ignored, similar to the way that the Earth is a round ball, but appears flat from the perspective of someone who does not travel a great distance over its surface. This means that over small distances, well away from strong gravity fields, one can use special relativity. And in special relativity, the speed of light is always equal to 'c'.

The independence of the speed of light from motion of the source has been measured in a number of ways, one of the most direct was to measure the speed of light emitted from a moving source. There are both cosmological sources that move with high velocities to us, and terrestrial sources that move with a high velocity and emit electromagnetic radiation, such as pi mesons (which move at a high fraction of 'c'). The speed of light from pi0 mesons has been measured to be equal to 'c' within 400 parts per million, in spite of the large velocity (.99975 c) of the mesons. See for instance http://math.ucr.edu/home/baez/physic...periments.h... for details of this and other experiments.

The lack of dependence on the speed of light shows up in experiments like the Michelson Morley experiment. The Earth is constantly changing it's speed due to the fact that it is orbiting the sun, but we've never seen any indication that this affects measurements of the speed of light.

Some of the experimental tests of relativity are discussed at http://math.ucr.edu/home/baez/physic...periments.h...

There is a distinction between a redshift in cosmological context as compared to that witnessed when nearby objects exhibit a local Doppler-effect redshift. Rather than cosmological redshifts being a consequence of relative velocities, the photons instead increase in wavelength and redshift because of a feature of the spacetime through which they are traveling that causes space to expand. Due to the expansion increasing as distances increase, the distance between two remote galaxies can increase at more than 3×108 m/s, but this does not imply that the galaxies move faster than the speed of light at their present location (which is forbidden by Lorentz covariance)

The differences in velocity are only well-defined locally. When comparing the velocities of two objects far away, General Relativity provides no answer. We can, of course, write down some coordinates and come up with some measure of velocity. But whatever measure we write down will be arbitrary.

This is, fundamentally, why there is no problem with far-away objects moving "faster than light" compared to us: If I compare the velocities between far-away objects, I can come up with any velocity I choose just by picking different coordinates. Obviously there can't be a limit if I can make the velocity anything I please!

The actual speed of light limitation in General Relativity, then, is purely a local limit. It states that any person that is observing the speed of a photon passing by them will always measure it to be moving at the speed of light. This also means that if we look at a far-away object, no matter how it is moving compared to us, it will always be seen to move more slowly than the photons moving past it..