My personal theory is main reason is that we don't practice reading as much in this era. Some claim it takes 10,000 hours to become an expert at skill. Dumping that many hours alone doesn't get you there though. Just like a weight lifter you need to keep pushing your limit by adding a bit of weight to the bar from time to time to gain muscle rather the just retain what you currently have.
Between Steam, Netflix, and your pick of social media there are no end of ways to keep yourself busy in more immediately gratifying ways. Getting in the hours and stretching that mental muscle a bit in book form no longer happens naturally. To be as literate as the generation before you you almost have to consciously choose to put in an equal effort since boredom is not as plentiful as it once was.
That said there are is no lack of other contributing factors as well, but reduced experience as the reason in my opinion seems to best explain why the average dips without the the whole curve dipping.