Some people are in shock and awe about the speed of this development and how the loss of traffic actually keeps accelerating when you think they might have hit rock bottom. Personally I think that is simply the logic of the business they are in. In most cases, it is not even bad management or wrong strategy: it is the so-called "network effect" that made them benefit at the very beginning - and now leads to impending doom.
Social networks create most of their value from the amount of users that on the one hand create, on the other hand consume content. That is their network effect. The more users you have, the more attractive your platform becomes for other users - and the more value is created. That is why StudiVZ, myspace and many others had staggering growth rates once they reached a critical mass of members - even if they weren't the best products around.