Man U is in a decline? U can say that. But u can look at it another way. Man U is actually stagnant. In recent years, which world class player has arrived at Man U? Wayne Rooney, Ruud, and maybe, Edwin Van Der Sar. That's all. but it didn't help them much, because it is in the midfield where they need reinforcements. Ronaldo, Park Ji Sung, Paul Scholes, Darren Fletcher, Kieran Richardson and Roy Keane don't really inspire fear in the opposition. Teams like Chelsea have a world class midfield. Makelele, Lampard, Essien, Shaun Wright-Phillips, Joe Cole, Damien Duff, Arjen Robben to choose from. That is the midfield any team in the world would want.
And then, there is chelsea factor. Man U, Arsenal have fought each other way too long, that they didn't expect the emergence of Chelsea last season. Now, u see Arsene Wenger and Sir Alex Ferguson spend a lot of time in the press trying to talk about Chelsea, rather than worry about their own team. Mourinho, in contrast, cared more about his own team, than bothering to respond to them. Arsenal and Man U spent too much team worrying about Chelsea, that they forgot about other teams. It affected the players, and that's why Man U/Arsenal are now losing to teams like Blackburn, Boro, West Brom.
Man U needs two more midfield players, preferably guys in the mould of Ballack or Vieria, who can create chances and plug the defensive holes. But even then, it may not amount to anything this season, as it seems a foregone conclusion that Chelsea is running away with the league title. But next season, if they can learn not to let chelsea affect them, and sign a few new players, things may change.