I think there are many factors involved for the quality going down:
1. Quality -- The need for speed game released in 2007 & 2008 has really sub-par quality, Need for Speed was respected as a great racing franchise, the 2007 version ruined its reputation, this is why Need For Speed : Undercover did so bad in comparison, the franchise lost fans.
2. Racing Genre Decline -- There has been a serious decline in the sales of racing games this gen in general. Forza 2 did very well due to bundling, apart from Forza 2 most racing games havn't done too hot. Actually GT5 is the banner racing game, as its not released yet ther may be many racing game fans who do not have a console yet.
3. Focus moving from traditional NFS -- EA change the focus of a NFS every year, this gives us all a very mixed message about the series.







