Author Brian J Robb insists that the 'classic' series declined in the 1980's because the programme makers failed to engage with the (ever dwindling) audience, and that 'the fan's' producer John Nathan Turner in particular pandered to (an ever influencial) fandom.
In the introduction of Timeless Adventures: How Doctor Who Conquered TV (Kamera, 2009), Robb establishes the crux of the whole book, that this unique series "earned it's place in the affections of British TV audiences because underneath it's fantastical adventures was a critique of contemporary social, political and cultural issues".
Indeed, the success of today's revived incarnation of the show owes much to a thorough engagement with modern culture, initiated by it's first showrunner, Russell T Davies.
Each successive production team positively engaged with those ideas and events happening around them, until the reign of Graham Williams when the show began it's retreat from any popular engagement. Instead, Nathan Turner continued to "exploit the growing cultural and interlectual phenomenon of postmodernism" by attracting audiences with nostalgia, but becoming bogged-down with continuity.
I wholly concur with Robb that despite the seismic political and social upheaval of the 1980's, it seems astounding that Doctor Who- previously such an aware series - should abdicate virtually all knowledge of Thatcher's Britain (even by 1988 the imagery of The Happiness Patrol appears past it's sell-by date).