Interesting take, thanks!

On the contrary, the Hollywood mainstream was out of touch long before 1968. There are certainly exceptions: Stanley Kramer, Otto Preminger, and Sidney Lumet were always making socially relevant films and Hitchcock and Billy Wilder were still geniuses. But the gritty noir and screwball comedy of the '40s and '50s was done. Western and sci-fi made with adults in mind had migrated to television (Gunsmoke, Bonanza, The Twilight Zone, Star Trek), as had a great deal of the comedic talent. The youth market was seeing increasing competition from independent studios like AIP and young American stars were going to Europe where they could star in better, more innovative films. All that Hollywood had left were bloated musicals and costume dramas.
By 1968, even a certified legend like Henry Fonda - probably fed up with no longer seeing scripts on the level of
12 Angry Men
or
The Grapes of Wrath

• had traveled to Italy to star in a spaghetti western.
  Thankfully Hollywood adjusted and didn't
  change
  so much as return to form, once again producing serious content for adults, dealing with all of life's dilemmas. As a result, the American cinema of the last half of the '60s was, on average, superior to that of the first half and the '70s became perhaps the greatest decade in cinematic history.
  There have been ups and downs since then, of course, the '90s being particularly strong with the emergence of new independent voices. But there have been good films and bad films from the time cinema was invented.
  If you want to peg any event as the end of the Hollywood golden age, I would say that the blacklist spelled the beginning of the end. Writers and directors were forced to play it safer and independent studios and foreign cinema came along to fill the vacuum, forcing Hollywood to adapt or die.
  Draft Barron Trump