Not a surprise that their last two biggest "storylines" in Bryan/Punk catapulted from a combination/extension of some real-life drama+giving free reign to those characters to exude their own natural charisma/personality. Doesn't hurt that they were A level guys. And in Bryan's case, unfortunately he got hurt, but they ruined Punk by force-feeding him Triple H and burying what made him hot.
They do this an awful lot because as others have said, it's built around an audience of one, Vince. And it's not a coincidence that the things he doesn't usually have full oversight of, are the things that usually flourish within the company.
And the declining viewership is what happens when you actively don't listen to your audience AND treat them like idiots. It's not a surprise that eventually, even the most hardcore of viewership will start tuning out. This isn't even any longer about chasing casual fans, they're bleeding the sort of viewers that have usually watched Raw/SD out of habit, except they've broken that habit because the product right now stale/repetitive garbage.
And they should be worried because the indies/NJPW will start eroding into that business, because that's where those lapsed regulars are heading in droves. And the easier it becomes for even casual fans to access that stuff, the more they should worry.
It's not even a case of not having the horses, because they have a roster that can work their asses off, but in a world where everyone is the same and the consequences don't matter, why should anyone bother tuning in? And I know they run different models, but it's hard not comparing them to NJPW and how fucking lame they are in comparison. Compare everything they just did with thier BOSJ tourney, which was simple, straight-forward in-ring story-telling and all the mediocre shit that the WWE puts out and it's night and day.
At the end of it, Wrestling is art, and the WWE is often-times a trashy, mediocre lowest common representation of that art. It's like the Applebees of Wrasslin/Sports Entertainment. And nobody wants that warmed over garbage.