In the South at a second tier university, it amazes me how alive everything seems and how useful the research coming out of there is. I don't really see the decline. The growth and construction and hiring just goes on and on. Wouldn't be shocked if the financial situation of some states (Illinois, hello) would cause some major difficulties with publicly financing education, but is that going on throughout the country?
Certainly a danger going forward will be private companies that can far outpace anything academia offers in money, prestige, or mobility. The semi-closed, semi-open nature of the research teams at the bigger companies is confusing, in particular, but if they are disseminating that research, it's hard to argue the private route of research is especially worse than the public.