1. Yes, quite a few of them were regarded as scholars in Islam. Some have seminal works on different aspects of Islamic science. During a certain period, memorizing the Quran and learning the essentials of Islamic science was a prerequisite to further pursuing study in the natural sciences. Keep in mind that this is not the rule, and depends on the specific time period, region, and "flavor" of Islam the scientist followed.
2. Just after the decline in power of the Ottoman Empire (around 1500 AD or so), Europe began to flourish. The Ottomans were not able to keep up, and were overpowered both in military might and scientific advancement. This worsened with the expansionary period in Europe (1600s-1700s), and reached its peak with the colonial period.
The colonization of the entire Arab World and the fall of the Ottoman Empire together were just too much - Muslims were lost. Unfortunately, they put the blame on Islam while the blame was simply on lack of unity, general decadence of the ruling elite, and pursuit of material gain rather than scientific advancement. In addition, the colonial powers themselves made sure their subjects didn't get much done. Even after they left, the effects remained for quite some time. So scientific development was put on the side, and that's where we are now.
As an example, in 2013, South Korea (pop. 50 million) was granted 120,000 patents. The entire Arab World (360 million) was granted only 7,000. We are just too far behind.