This is a question that was asked of my by a good friend when I was doing my list of greatest directors of all time. There seems to be an almost gravitational pull to mediocrity and badness even from the greatest of directors.
I was contemplating this when the Nostalgia Critic made a video about this very subject. And most of what he says is cogent and compelling.
Check it out below (WARNING: a bit vulgar in the first few seconds)
Essentially he says that there are a few different categories of directors going bad:
1. The Ground-Breakers: These are directors that do something so influential and excellent early on. The reason that they go downhill is two-fold;
a. Expectations. Having set the bar so high it becomes almost impossible to reach again. Lucas' original Star Wars is considered by many to be the best of the franchise and the best of Lucas' career. Very few people would argue that the first Matrix was the best and that the others are nowhere near as revolutionary.
b. Lack of Limitation. Once these directors are declared geniuses, they think that they can do no wrong. They forget that their limitations and compromises often made their films better. Remember Spielberg originally wanted to show much more of the shark in Jaws. It was only because of mechanical reasons that he had to force himself to creatively show the shark's presence without the shark. This jump off the deep end is seen best in M. Night Shyamalan. His first 3 films were so critically praised that he began to think all his ideas were gold. This led to massive stinkers like The Lady in the Water, The Happening, and After Earth. By buying into their own hype the close themselves off to the criticism that will keep them grounded as storytellers.
2. The Repeaters: These are directors who start off new and fresh, but begin to wear out their welcome when we find lots of repeating motifs in their films. He points to Christopher Nolan and how he uses a lot of philosophical talk leading to a long running time and a complicated story. For those who direct for a long time, the creative juices begin to run dry. John Carpenter infamously began plagiarizing his earlier movies for his later movies. Don't believe me? See Ghosts of Mars and you can pick out all of his earlier films that he steals from.
3. The Occasional Director: These are directors that do not direct very much. As a result they may not have a large body of great films and thus give the impression that they degrade in quality. Francis Ford Coppola has made some truly classic movies, but he doesn't make that many. Can you name any that he made in the last decade?
4. The Hit or Miss: These are directors who always swing for the fences. They have bold story-telling styles. But that boldness does not always guarantee successful storytelling. Because they don't play it safe, they either knock it out of the park or strike out. The Nostalgia Critic points to Tim Burton as a good example. His good stuff is amazing, but his bad stuff is horrible. But both bear the same extreme style. I would say the same thing about James Gunn who directed the awful Super but made the amazing Guardians of the Galaxy. In one the extreme style failed and in the other it worked.
I would add only one other reason to the ones listed by the Nostalgia Critic:
5. Fatigue: Directing a film is a draining processes. To do it repeatedly requires an incredible amount of stamina. There are so many forces aligned against you from making good art that I think it is impressive that as many good movies get made. And like anything else, routine and labor can turn a work of passion into a monotonous activity. I am surprised more big name directors don't burn out more.
Of all the above factors, I think the lack of limitations is the biggest. We may big-budget spectacle, but many would agree that most blockbusters lack the character and heart of classic films. When the ability to visually realize your film was less available to directors in the past, they had to rely on emotionally grounding the characters so you could suspend your disbelief. But now our special effects have become 3D and our characters have become flat.
A great storyteller will know their strengths but they will always challenge themselves. I disagree with the Nostalgia Critic's assessment of Nolan. With each film I see him doing what he does well and then adding another layer. In Interstellar I saw someone who once again asked philosophical riddles. But I saw a director reaching deeper emotional truths than he had ever reached before.
Anyway, those are the reasons good directors go bad.