I don't think that the USA saw a decline in Ladies. The beggining of this season was ufortunate for the USA, because 2006/2007 is a season of transition for this nation. After the retirement of Michelle and Sasha, the USA have plenty of young talents that can seriously destroy the Japanese supremacy in next years. And Kimmie Meissner can surprise us at Worlds in 2007, as she did last year.
I think that Russia is in a serious decline. I remember in 1999 and 2000 when there were Slutskaya, Butyrskaya, Sokolova, Soldatova and Volchkova, all capable of placing in the top10 at Worlds. Now they have Sokolova and Martinova.
USA ladies were always strong after 1950. Just their opponents changed. In the 70s and in the 80s it was USA vs DDR (Seyfert, Errath, Potzsch and Witt). In the early 90s three Americans stood on the Worlds podium. Their rivals were Ito, Baiul and Chen.The years between 1998 and 2003 were 5 years of battles between USA girls and Russia girls (especially Kwan vs Slutskaya). But the Japanese were becoming every year stronger and stronger. Now it seems a Japanese (and 1 Korean) supremacy. But the USA will find their new weapons.