I find that when you examine The Simpsons and where it may (or may not) have gone wrong you should look at the following aspects of it. : It’s structure, character relationships, basis in reality and the primary focus of the show.
When you examine the Simpsons you will notice that majority of the early episodes had a basic structure of ‘plot + subplot’ eg ‘9f14 Duffless’ where Homer has to quit drinking for a month whilst Lisa supports the story running bizarre science experiments on Bart’. I think from the beginning that the writers wisely realized that there wasn’t enough depth to these characters to warrant a focused 30 minute story about any of them. They therefore split the burden and came up with a system that worked.
This all started to change around Season 7 (1995-96) and (for my money anyway) was heralded by the episode ‘3F20 Much Apu About Nothing’ in which the townfolks force Quimby to introduce a ‘bear patrol’ tax and ends up in a debate about deporting illegal immigrants. If you can see the connection between these two then please tell me but for now you’ll just excuse me if I write it off as bad storytelling?
Anyway. this process of ‘switching’ became the norm and whilst they made the screenwriting process less ‘anchored’ it also removed my ability to ‘invest’ in the storyline because I knew deep-down what whatever happened in they early part of the show would be discarded in favour of a newer (and usually more-implausible) situation.
Check out ‘DABF22 How I spent my Strummer Vacation’ to see what I’m talking about. This ep starts interestingly with Homer revealing deep down that resents his family and that a solution must be found for his problem. The solution? To send him to BAND CAMP of course! A camp in which Mick Jagger and others (because they of course have nothing better to do) teach Springfieldianites (yes that is an official term for them) how to play guitar!
Character relationships (esp. regarding the 5 main family members) was an important aspect of the show for me but this feature has deteriorated to the point where I don’t actually care about these ‘people’ anymore. Coincidentally this is the same impression I get of the family’s feelings towards each other. Out of interest when was the last time you saw any of them (Marge excluded) sacrifice anything for their fellow family members?
I think ‘2f15 Lisa’s Wedding’ was the last time I remember feeling anything genuine about the family’s interplay with each other. I refer in particular to the scene at the end of that ep where Lisa realizes she should cherish Homer for the good in him and not feel embarrassed by his boorish ways.
However since that ep the emotion has either been forced by the writers or just completely neglected in place of a juggernaut of hit&miss jokes.
Basis in reality
When it comes to The Simpsons this is a tricky topic because, lets face it, it’s a cartoon set in a fictious city with mainly stereotypical characters. So you’re already out on a ledge when it comes to arguing it's basis in the reality. But what I’m talking about here is the facets of the inhabitants of Springfield that we as real people can identify with in our own lives. Things, for example, like having to get up in the morning and do a job we hate to pay the bills. This used to be Homers lot in life but now (as one character recently pointed out) he doesn’t seem to ever even turn up to work anymore!
I think the first instance of an episode that just stretched the realm of possibility TOO far was the one where Homer becomes an astronaut ‘1f13 Homer Alone’. It was clear that after this episode all bets were off and that this show had lost the run of itself.
Shift in focus of the show
The last and most important thing that killed The Simpsons for me was a shift in it’s focus from ‘the family‘ to just Homer. I say this because Homer (for all his entertainment) is not a very likeable character and should only be taken in small doses (much like Marges nagging). Don’t get me wrong, I like everyone else found his buffoonery and ignorant comments funny at first but as his persona started to envelop the show the writing started to reflect what he is in essence ie lazy, stupid, soulless and uncaring.
Anyway, that’s just my quickly composed ramblings on it. So to answer your question : Yes the Simpsons has lost it. It lost it a long time ago and it's basically been dead for the best part of a decade now.