Mark Bauerlein at First Things has an interesting essay on why he thinks this has happened. He writes:
Today’s job market is beyond depressing. Openings in English dropped by 55 percent between 2007–08 and 2017–18—from 1,826 listings to 828—and undergraduate demand for the services of the lucky few who obtain a job continues to decline. From 2011 to 2017, the number of English bachelor’s degrees fell by more than 20 percent.But then disaster struck. Teachers of literature became enamored of French deconstructionism and theorists like Jacques Derrida and Michael Foucault:
In the sixties, the opposite was happening....The number of institutions of higher education climbed from 2,008 to 2,525 during the same period. Mass hiring of professors took place, with the number of instructors increasing from 281,506 in 1959–60 to 551,000 in 1969–70.
English was a major beneficiary of the growth. In 1959–60, 20,128 graduates earned bachelor’s degrees in English; ten years later, the number had nearly tripled, to 56,410. One year after that, the number of English majors earning a four-year degree hit 63,914—one out of every thirteen students....General education requirements typically included semesters of freshman composition, foreign language, Western Civilization, and a separate literature course, making literary studies a centerpiece of everyone’s formation.
The popularity of English was a luxury enabling American disciples to be almost mischievous in their admiration of the difficulty of the new theorists. Derrida’s dense dialectical presentation in Of Grammatology wasn’t going to make many wavering sophomores decide to major in English or French. Foucault’s treatment of torture and prison wouldn’t lead parents and alumni to become donors.But the indulgence in a form of literary criticism that no one could understand had a baneful effect on student enrollment. Bauerlein cites a typical passage from the work of one deconstructionist:
Their vocabulary reduced the audience for academic criticism. American undergraduates couldn’t understand it, but so what? The obscurity wouldn’t be a problem as long as resources and students were pouring in. If classes were full, the American scholars who embraced the new theorists could welcome a foreign discourse steeped in Hegel, Freud, Heidegger, and European linguists that only a few sub-sub-specialists had mastered.
Why bother with reader-friendly prose if research funds and outlets are plentiful?
A choice must then be made: either to place all texts in a demonstrative oscillation, equalizing them under the scrutiny of an in-different science, forcing them to rejoin, inductively, the Copy from which we will then make them derive; or else to restore each text, not to its individuality, but to its function, making it cohere, even before we talk about it, by the infinite paradigm of difference, subjecting it from the outset to a basic typology, to an evaluation.Such gibberish turned students off. As Bauerlein notes: Students majored in English because they’d read Shakespeare in a freshman course or Hemingway on their own and found in these and other works satisfying reflections of themselves and their lives. They identified with Odysseus and Nick Adams, and they wanted their classes to help them refine their enthusiasm and appreciation for works of literature.
But deconstructionism forced students to ignore the skill of the author and the truth the author sought to convey and focus instead on the authors' "center":
Derrida pushed a radical skepticism that targeted the very idea of core meaning, original intention, or truth in or behind or before or under the work itself....Claims to true interpretation, Derrida said, rested upon a “center,” something outside the work that explained constituents of it—an author’s psychology, his religion, his class relations, and so on.Race and gender were soon to be included. Interpreting and appreciating the writing itself was secondary to the status of the writer. Everything must be interpreted in light of that status and that interpretation was open-ended. The interpreter or reader never arrived at any final conclusions:
This embrace of the heroic role of the endless interpreter swept everyone away. The search for the central truth of a literary work was over. The rehearsal of the forever-deferred and “problematized” truth of the work took its place. No more truth, only “reading.”A well-written novel was no longer considered a work of art in itself. It was only important in light of what it said about the author's "center." This may be of interest to sociologists and psychologists, but many lovers of literature found it sterile, arcane and disappointing.
This model was never going to attract very many American sophomores, who thrill to literature for its love and hate, intrigue and action, conflict and lyricism. It did not impress the literary reading public, either, the individuals who had season tickets to local theaters and subscribed to the Book-of-the-Month Club.
Sophomores today who want teachers who will teach them that Faulkner has special insight into the human psyche and that Pope’s couplets are the height of verbal refinement won’t easily find them. When I finished graduate school in 1988, those kinds of evaluations were already off the table. Theory had made everyone cannier, or so we thought.
You had to be careful not to “privilege” literature. You did not permit yourself overt enthusiasm for great novels or poems. You submitted “texts” to analysis—you “performed” a “reading.”
In any case, there's more to Bauerlein's essay at the link.
Not being in the field of literature myself I can't say whether Bauerlein's analysis of the decline of English as an academic discipline is correct or not, but it's certainly interesting and seems plausible. I would add, though, that the dearth of career opportunities in which a degree in deconstructive literary criticism is helpful is doubtless also a factor in the decline of the number of students who choose to major in English.