This article "65% fewer Arena teams in Season 5" has lit up discussion across the blogsphere and message boards. The original article itself has over 150 comments.
I believe the phenomenon is most easily explained, and predicted, by an article by Rohan of Blessing of Kings call Being On The Path. This was written back in May of 2008.
Allow me to quote a few paragraphs from that excellent piece:
The key is the concept of "Being On The Path" for endgame content. In nutshell, the number of people who reach the highest point of endgame is less important than the number of people who are working towards--and feel that they one day could achieve--that point.
As long as a player is "on the path", everything is fine. The real crisis point are when people are unable to get on the path, or their progress on the path becomes completely blocked. I think it is more important to help the guilds who are trying to become raiding guilds.To help the people who cannot get on the path at all.
This is why I feel Rating Requirements are a bad idea. If you are a casual PvPer, one who tries, but isn't really all that good, you've basically fallen off the path. And that is demoralizing.
The number of players who achieve the end is less important than the number of players who are on the path to the end. The number of players in Sunwell is less important than the number of players on the path to Sunwell. The number of players in Season 4 gear is less important than the number of players working towards Season 4 gear. With the advent of extensive Rating Requirements, the number of players on the path to Season 4 gear will drop drastically, and that is an unhealthy state for the PvP endgame.
Why did we not see this decline until Season 5? In Season 4, there were still enough players "On The Path". The rating requirements had driven some away, but you could also attribute those losses to the upcoming Expansion.
What changed between Season 4 and Season 5? The addition of Rating Requirement to not only Arena gear, but also Battleground gear. Now more people fell off the path. The people left doing Arenas were the very skilled and very well geared making the process even more frustrating for casual PVPers.
It's a component to my own lack of interest in PVP. I like hanging out with my guild, but there is zero tangible reward. Without doing Arena, and doing it well, I'm locked out from most PVP gear.
I've fallen off the path.