Russia has a long history of producing excellent programmers and software engineers, I'm not sure where you get the idea this is where they were outpaced by the rest of the world.

If I had to attribute one thing to Russia's downfall, it would be its geopolitical decision to align itself with China and Iran in global anti-Western sentiment, rather than moving towards joining the rest of the West and the EU as some countries hoped they would back in the 90s.