I believe it had to do with the way they irrigated. They would flood their fields, which would leave sediment from the river as the water evaporated. The sediment contained salt, which slowly accumulated, and made the fields infertile.
I have no knowledge about the eastern portion of Egypt (Sinai?) being richer than the western one, afaik the wealth of Egypt was always centered around the nile and nile delta (even today). That's probably what the breadbasket refers to.
Wheat yields progressively fell as salt accumulated in the ground. They switched to barley until that crop failed too.
According to the book, almost all ancient agriculture was unsustainable. If not because of the irrigation, it was because plowing caused too much soil erosion. The only places that could get away with it long-term were Egypt and China, because of the flooding and lime replenished the soil.