It's a really interesting debate. If you look at Everton's history it could be summed up as failing to capitalise on promising positions. We have the worst title defence in 1971, 2 World Wars and being 10 minutes from relegation 7 years after winning the league!
As people have commented there are a number of issues. It goes without saying Heysel didn't help, yet other teams grew in such a period. My own view is it wasn't a central cause but it exacerbated other problems.
The first is letting Kendall go. I appreciate he wanted to work abroad, but you're job if you are a chairman is sometimes convincing and persuading people that your vision is worth sticking with. Kendall was binned off a little over 10 years later in his mid 50's. It's criminal he was allowed to move on. He was still a young manager and could have built a dynasty. Replacing him with Harvey was a reasonable decision, but top man though Harvey was wasn't cut out to be a number 1.
I think the club lacked ambition. There wasn't a clear "vision" to sell to Kendall and others. Rush becomes available at around this time and we don't sign him back, rather spending huge money on Cottee. It saddens me to say it, as both clubs drove each other on, but Liverpool were prepared to go further than Everton and the acquisition of Beardsley, Houghton, Barnes and Aldridge led them to have one of their greatest ever teams. We lacked the same ambition.
Perhaps the biggest point though was rather than see the early 90's as a dip to ask the question of whether the mid 80's success was the blip? We were a club in a bad way from the late 70's through to the mid 90's. We stabilised subsequently but as has been suggested I would say it is only now we have proper leadership at the top, for the first time in 40 years.
The success in the 60's was to a certain degree inevitable. Some may say Catterick under achieved given the resources he had. We had great young players, massive crowds and huge sums to attract top end players. Kendall achieved what he did improbably. He gambled on younger players, some out of favour older players (Like Grey & Reid who remained fit) and managed to find the best goalkeeper in the world playing in the lower leagues. It's a try remarkable achievement, but it does have to be asked, could such an approach have led to continual long term success as witnessed at other teams?
It's interesting as Kendall tries a similar strategy when he joins on both other occasions. He buys younger players from unknown teams, promotes internally, gets a target man in (or fails too with Dion Dublin) and gets players in from the reserves of better teams. It worked in the early 80's, yet failed twice afterwards. The question does have to be asked as to which was the true blip? How many Kevin Sheedy's play for Liverpool reserves? Or Southalls play for Port Vale? We moved from them to John Oster and John O'Kane.
I don't think the club really knew how to stop the decline. The success was really down to the brilliance of Kendall and in his absence as the players who he'd gambled on slowly aged we could see we couldn't replace them. There will be arguments that we replaced the old guard too early, or showed too much loyalty. I have heard both accounts. The dressing room was very split between those who had played under Kendall and those signed by Harvey. I do wonder if they only touch on the wider problem though, which was without the brilliance of Kendall and the fortune we had on players coming good how do we match what we did in the mid 80's? That hung over us and made things more difficult.
By the late 90's, though results on the pitch had declined further you could begin to see some improvement. Off the field our academy was much stronger which was grounds for optimism. In Kenwright at boardroom level, while we had no money to compete we did at least have a safe pair of hands and not the intro and indecision that had been previously.
Anyway, funny times and a good debate.
