I have a simple analysis;
Liverpool, through many years built up a well oiled football machine, supported by the heirarchy at the club. They had a manager in Shankly who, through a simple honesty and the ability to motivate both fans and players created something, that whilst relatively successful felt more than just a football club, more a family. Off the pitch a series of CE's, Williams, Peakes, Cartwright and Roberts, stayed out of the limelight and supported their manager. In the mid 70s Paisley, supported by John Smith as Chairman, developed this well oiled machine into one that was significantly more successful as well. Values and principles dominated the club throughout and shrewd management and the spirit of the club took the foundations laid down onto greater things.
Heysel and later Hillsborough created cracks in the club which showed through later, Heysel broke Fagen and Hillsborough probably helped to break Dalglish, although we will never properly know, either way it did not help. Kenny's sudden disappearance around the same time as Smith saw the foundations start to be undermined and although others from the past (Robinson, Evans, Moran) remained the balance had shifted.
The appointment of Souness was a key moment, I remember the day and everyone was delighted that a massive figure from the club's past who had proved himself by breaking Celtic's stranglehold in Scotland was the man to fill the gap left by Kenny's unexpected departure. What we had forgotten was that Souness was no great respector of tradition and a man who stamped his authority wherever he went, right or wrong. I saw his first game at LFC and he took to the pitch in a team who had just won the EC like a man who wanted control. In Scotland he'd signed a catholic for Rangers, he'd ripped out the scottish heart of the team and he set about removing the old guard at Liverpool in a way that he himself recognised later as to much too soon.
He couldn't replicate the success he'd had in Scotland and whilst he'd been trying Manchester United had moved in and filled the vacuum and we'd signed alongside some average players, others who would not have been tolerated in the past, notably Neil Ruddock. LFC had always run a tight ship in terms of discipline, plenty of players were shipped out for indiscipline and whilst that continued, tolerance crept in. Football fundamentally changed at this time and a new economics meant that old practices on their own could not guarantee the same results.
At the same time David Moores took the helm, with Robinson still present for a short while and, now with evans in control the club lacked the confidence and discipline that it formerly had. Evans restored some of the values that had been lost but too few. Similiarly Houllier, who, unusually for a french manager, had an appreciation of the clubs history did his share of restoring discipline in the early years, Benitez made further contributions to improving the quality of players on the pitch and organisation on it, unfortunately the loss of values and strength off the pitch undermined the financial potential of the club and, in a related move alllowed two charlatans to walk through the front door and mug this respected club, effectively tieing it up in the corner and pilfering the valuables whilst at the same time attempting to dress it up and sell it on. This dressing up for sale plan went awry once their decorating funds were hit by the credit crunch.
It takes years of work to build traditions and values and principles are the things that keep them in place. It takes only a short time to destroy these traditions with greed, intolerance, lack of respect and a failure to listen to the heart of the club (the fans) being the forces let in to do that damage. Some of the values remain, only just in cases, others are slowly being restored but as everyone knows it harder to build than destroy and if your foundations are unsound you are wasting your time.