Majority or the reason has to go to injuries. He tore his ACL! For an explosive wrestler/KO artist that's one of the worst possible injuries. He never looked the same after that, even in Japan, losing to a green Joe Warren and Kanehara.
KID came to the UFC as a 34 year old bantamweight with surgically repaired acl and surgically repaired elbow.
He lost his speed and due to his fucked knees he could no longer defend takedowns. We saw that in all of his losses. This guy was a stud wrestler and gEtting taken down by BJJ bums.
"Prime" isn't just about age, it's about physical condition. Shogun Rua was past his prime when he won the UFC belt at age 27 - you can tell his striking style was so slow compared to before his knee injuries, and the Shogun that fought Hendo looked like he was waist deep in water compared to his prime.
You can't compare bantamweights to bigger guys, even if they are older.
"Godfather of TRT" Randy Couture retired after a 12 year career. KID was already 10 years into his career when he came to the UFC.