"Vroeger werd alles met de hand geschreven."
Translation:In the past, everything was written by hand.
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You're right, "was being" should be accepted. I've added it.
The difference between "werd" and "is" in the passive voice is that between imperfect (simple past) and perfect. The former views an event from the past, it's a story-telling tense. The latter views it from the point of view of the present, typically focusing on the results of the action.