Shrauta downgradation

Source: TW

That downgrade happen long back within shruti itself. First by prajApati and then by aupanishadic brahman.

In brAhmaNas, prajApati is the creator of devas, time entity, year and yajña. He feeds indra like a mother feeds a child (panchavimsha of samaveda) and other ākhyānas.

In kenopanishad, brahman bests the important devas - agni couldn’t burn a grass, vAyu couldn’t lift it and indra came closest to the brahman in the form of yaksha. Also in taittiriyopanishad “bhIShAsmAd vAtaH pavate…”, found in kAThaka too - through the fear of brahman wind - “Through the fear of him, indra and agni etc.”

Almost all of the stories of indra’s “so called negative qualities” are right there in the brahmanas. Slaying trishiras, ahalyAyai jAra, etc..

prAjapatya-raudra competition

In parallel demotion of prajApati happened - crushing of his head by rudra as he went after rohini (actually an astronomical myth, came handy for shaivas). PrajApatyas retaliated by making the 1000 eyed rudra born from prajapati As anapagatapApman.

vaiShNava favor

IMO development in shruti sort of favored vaishnavas -
(1) purushasUkta with uttaranarayana favors purusha as Vishnu and
(2) arunaketuka chayanam in taittiriya aranyaka has prajapati meeting his creator, the tortoise who became “sahasrashIrshA shasrAkshah” the purusha of purushasukta and initiates the creation. (Tortoise originally was indra.)
You see a parallel attempt by shvetashvatara by shaivas but it’s sort of too late.