When was the game up for prog rock?

Basically bands were changing or breaking up as you say for the simple reason that those bands weren't making money. The end was coming when bands like Emerson Lake & Palmer were taking huge orchestras out on the road. They were bleeding money. You can't keep doing it without something breaking. The other thing is that people were getting sick of 10 minute guitar solos and 30 minute songs. Punk offered a simple alternative where you reacted to what the musicians were saying rather than what they were playing - mostly antiestablishment and a rejection of Maggie Thatcher's England. When prog revived in the 90's it came about because of the love of music of the prog era and the challenge of being able to play it. This era of prog isn't about money because there isn't money to be made from prog, just a love of the music.

Overall I don't think nothing in particular happened, just the "circle of life". What happened to glam metal at the end of the '80s? Punk at the end of the '70s? Grunge in the mid '90s? Psychedelic rock in the late '60s? Genres enjoy a period of popularity when they're new and then they lose popularity. One could argue prog had actually a pretty long run ('69-'78 roughly) and there were several succesfull acts after it as well (Marillion, Tool, Dream Theater). 

That blows my half-baked theory out of the water then.