I'd like to read your sources on that, because from what I checked in the meantime it looks like it's more of a “culture war” thing that a real thing. See: https://www.sdkrashen.com/content/articles/great_plummet.pdf which provides figures for tests results between 1984 and 1990 showing no such decline over that period.
Also, the PDF I quoted is from 2002, 10 years after California had legislated in favor of phonics in 1992 (which had never stopped to be used no matter what the urban legend says).
You realize that your link talks about the same time period as mine, and not about something that allegedly happened in the “mid to late 2000”?
> Goodman's three-cueing idea formed the theoretical basis of an approach known as "whole language" that by the late 1980s had taken hold throughout America.
Also, the PDF I quoted is from 2002, 10 years after California had legislated in favor of phonics in 1992 (which had never stopped to be used no matter what the urban legend says).