Part of this could be blamed by the rise in popularity of the NFL, which could itself be blamed by other, smaller facts such as the nature of the sport itself (fewer games make watching more exciting, for instance). But part of it is the proliferation of access to other teams across geographies, starting with things like pay-per-view channels and then evolving to webcasts and the 325 sports channels now available on cable.
All of this would have been a mere hindrance had Notre Dame been prepared to handle it by still affirming its status as the University of College Football, but certain leaders, like Hesburgh as you mention and Monk, chose not to do that. And the program became victim to opportunistic liars (Davie and Weis), social pressures (Willingham), and its relatively new inability to scout coaching talent (Kelly). It's been like an isolated thunderstorm hanging over South Bend, but it has unfortunately been caught within a large super cell and headwinds, such as the nationalization of the sport, that have made all the mistakes and those poor decisions all the more damaging because we've had no effective defense. It's been FUBAR all the way.
But luckily, because of this, when the ship is righted and Notre Dame is again a champion, it will feel like a miracle and be perhaps the greatest feeling any of us have ever known.