Is it because the later cars are much worse?
They really are much worse. The 70's were when Detroit *really* started taking their customers for granted and played the "where you gonna go" game with them.
Most people here in the US will agree that the worst time for the Big Three, in terms of the product they were putting out, was the late 60s through the 70s all the way into the early part of the 80s. Detroit spewed out cars that were poorly thought out, poorly built, and met no discernable market need. And when you had the temerity to bring back your defective vehicle and complain, the dealers and corporate sneered at you and said "Hey, that's how they are. Whatcha gonna do, go buy one of them Toy-ohtah tin cans? Mebbe one of them Daht-soon piles of s***?"
A certain percentage of Americans, like Britons, then did go purchase those Toyotas and Datsuns and liked what they discovered. Unfortunately, just like the Brits, most Americans enabled the continued bad behavior of their car companies by continuing to blindly buy American simply because it was American. (There *was* initially a social stigma here in the US if you bought a foreign car.) The continued cash flow from, well, idiots that were willing to buy whatever garbage Detroit churned out continued to encourage them to make even more crap cars. They never descended to the level of crap churned out by BL, but they kept on churning out the same old garbage with Madison Avenue marketing makeovers (can explain this later).
Meanwhile, more and more Americans slowly realized just how badly they were being taken by the Big Three. For Chrysler, this culminated with the Dodge Aspen and Plymouth Volare. Bad design, bad construction, bad reliability - and they actually expected to sell a lot of them based on prior models' sales. Instead, they hardly sold any. These cars ushered Chrysler to the brink of bankruptcy instead.
What had happened was that enough people were finally fed up with being sold a bill of goods that they'd sworn off domestics entirely. This is when Toyota, Honda, Nissan and the rest started becoming a force in the US market. Detroit spent the rest of the 80s trying to catch up once they'd seen their sales numbers drop. They didn't truly catch up until around 95 or so.
Detroit spent from 1969 to 1995 pissing all over their customers. They used to rely on customer loyalty to sell cars - "My dad owned Dodges, his dad owned Dodges, by god I'm going to own a Dodge." Well, now there are *two* generations of people in the US who have never owned a domestic in their life. And no longer even consider the domestics at all - because when they have, they get horrific experiences with the dealers (most of whom still seem to think it's 1973) and Detroit corporate customer service (likewise).
Case in point - the GTO aka Holden Monaro. A good, world class car, right? I was going to buy one for cash when they came out. I wanted a black GTO with a black leather interior and a manual transmission. It was going to be my first new domestic car ever, and the first new domestic car in my family in over 10 years. No Pontiac dealer in a 250 mile radius would order one for me, and they *all* tried to sell me cars in other colors with automatics even after I'd told them what I was looking for. Every experience was bad, and when I called GM to complain they basically told me, "Tough. You want a GTO, you have to deal with our dealers - because we won't help you."
So I gave up and bought a pre-owned Jaguar XKR.
While the domestic product is now there, or close to getting there, the service is not. Guess how likely I am to buy a GM car now?