The decline happened because they abandoned the realism of Mahabharata, Vishnusharma (Panchtantra fame), Vishnugupta (Chanakya) for "spirituality" which has become a neat word for escapism and finding comfort in defeat.
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Afflicted with the vows, thy cry is Religion! Religion! Hast thou from despair been deprived of thy manliness? Cowards alone, unable to win back their prosperity, cherish despair, which is fruitless and destructive of one's purposes. Thou hast ability and eyes. Thou seest that manliness dwelleth in us. It is because thou hast adopted a life of peace that thou feelest not this distress. These Dhritarashtras regard us who are forgiving, as really incompetent. This, O king, grieveth me more than death in battle. If we all die in fair fight without turning our backs on the foe, even that would be better than this exile, for then we should obtain regions of bliss in the other world. Or, if, O bull of the Bharata race, having slain them all, we acquire the entire earth, that would be prosperity worth the trial. We who ever adhere to the customs of our order, who ever desire grand achievements, who wish to avenge our wrongs, have this for our bounden duty. Our kingdom wrested from us, if we engage in battle, our deeds when known to the world will procure for us fame and not slander.
And that virtue, O king, which tortureth one's own self and friends, is really no virtue. It is rather vice, producing calamities. Virtue is sometimes also the weakness of men. And though such a man might ever be engaged in the practice of virtue, yet both virtue and profit forsake him, like pleasure and pain forsaking a person that is dead. He that practiseth virtue for virtue's sake always suffereth. He can scarcely be called a wise man, for he knoweth not the purposes of virtue like a blind man incapable of perceiving the solar light. He that regardeth his wealth to exist for himself alone, scarcely understandeth the purposes of wealth. He is really like a servant that tendeth kine in a forest. He again that pursueth wealth too much without pursuing virtue and enjoyments, deserveth to be censured and slain by all men. "
http://www.sacred-texts.com/hin/m03/m03033.htm
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I do not behold the creature in this world that supports life without doing any act of injury to others. Animals live upon animals, the stronger upon the weaker. The mongoose devours mice; the cat devours the mongoose; the dog devours the cat; the dog again is devoured by the spotted leopard. Behold all things again are devoured by the Destroyer when he comes! This mobile and immobile universe is food for living creatures. This has, been ordained by the gods. The man of knowledge, therefore, is never stupefied at it. It behoveth thee, O great king, to become that which thou art by birth. Foolish (Kshatriyas) alone, restraining wrath and joy take refuge in the woods. The very ascetics cannot support their lives without killing creatures. In water, on earth, and fruits, there are innumerable creatures. It is not true that one does not slaughter them.
What higher duty is there than supporting one's life? 2 There are many creatures that are so minute that their existence can only be inferred. With the failing of the eyelids alone, they are destroyed. There are men who subduing wrath and pride betake themselves to ascetic courses of life and leaving village and towns repair to the woods. Arrived there, those men may be seen to be so stupefied as to adopt the domestic mode of life once more. Others may be seen, who (in the observance of domesticity) tilling the soil, uprooting herbs, cutting off trees and killing birds and animals, perform sacrifices and at last attain to heaven. O son of Kunti, I have no doubt in this that the acts of all creatures become crowned with success only when the policy of chastisement is properly applied
. If chastisement were abolished from the world, creatures wood soon be destroyed. Like fishes in the water, stronger animals prey on the weaker. This truth was formerly spoken by Brahmana himself, viz., that chastisement, properly applied upholds creatures. Behold, the very fires, when extinguished, blaze up again, in fright, when blown. This is due to the fear of force or chastisement. If there were no chastisement in the world distinguishing the good from the bad, then the whole world would have been"
http://www.sacred-texts.com/hin/m03/m03033.htm
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Nobody is anybody's friend; nobody is anybody's well-wisher; persons become friends or foes only from motives of interest. Interest enlists interest even as tame elephants catch wild individuals of their species. After, again, an act has been accomplished, the doer is scarcely regarded. "
http://www.sacred-texts.com/hin/m12/m12a137.htm