Korea stopped dominating because Starcraft dropped in popularity inside Korea relative to newer games. Then the world's much larger population size produced a few players who could outcompete them.
Even today the GSL (the most competitive individual league for SC2) just had its last championship and is cancelled while the ASL (the most competitive individual league for SC1) is still going strong. However it was much bigger before SC2's release.
Not to take anything away from Serral, he's a fantastic player, but Korea was never as invested in SC2 as they were in SC1. Players were getting by on extremely strong mechanics and there wasn't the kind of professional team infrastructure that existed around SC1.