There is no one factor that is causing the decline. As with everything, its a number of things working together:
1. Lack of Creativity. Its been said here already. Comic book movies, rehashes of the same old stories done before. Not much need to go into it.
2. I don't think anyone has mentioned anything about perceived political bias.
They do not like the politics of the actors involved (ex. like someone choosing not to see a movie with Martin Sheen or Susan Sarandon) or they do not like the way the movie attempts to influence them (Fahrenheit 9/11 or Day After Tomorrow).
This all boils down to people believing that Hollywood has lost touch with the rest of American society.
3. Certain aspects of the economy that make it more difficult to attend the movies. A family of 4 will end up paying $30-$40 for tickets and if anyone wants food, that's probably another $20-$30.
Not terribly affordable.
4. Availability of home theater systems and fast turnout/features of DVDs.
5. Not as many "family" movies.
How many of you would take 8-10 year old kids to see something like Stealth, Dukes of Hazzard or The Cave?
Likewise, would you sit through Sky High or another Pokemon movie?
There are less movies that bridge that gap.