I am afraid that the decline in high dollar studio production has come about because of a precipitous decline in record industry profits. They are running at close to 20% of their gross pre-Napster.
People are buying ONE track on the iTunes store at 99¢ rather than the whole CD at $15.
You can't run and staff a world class facility, develop artists over time, foster and care for songwriters, and promote product as well as you used to on 1/5th of the money you USED to make.
People are making more records in home or small commercial facilities, because the big dollars from big labels for TOTL production has virtually dried up except for the highest profile artists.
And yes, the CD has gone from a musical delivery medium capable of 98db of dynamic range to a sonic abortion with a dynamic range of maybe 10db because of the 'louder is better' wars that labels have played with each other in an effort to catch radio programmer's attention. They don't care if it sounds good. Just as long as it SELLS.
Add that to the decline in popularity of high quality home audio gear... Most people listen to music on crappy computer speakers or badly set up surround sound systems for TV's. Those computer speakers are another primary reason for the drop in dynamic range... they sound like crap when given anything with a big range of dynamics, so 'let's just reduce it!'
Kids today are spending the money they WOULD have spent on hi-fi back in the seventies on computers, iPods, cell phones, blackberries, plasmas, all the detritus of the 'digital age'. So, even if you DID make a great sounding CD, their gear would not play it back well...

Sad, really...