I understand what you're saying. But I don't know if it's that their skills drop so much as they stop exploring new areas. Any artist in any field generally defines the areas of his/her interest and the language with which they will try to explore those interests relatively early in their careers. They then spend the rest of their lives exploring those areas. As they do, we become accustomed to their voices (by this I mean an artistic voice, not just how someone sounds) and begin to expect future art to build on what's already been said.

So to a public which had grown accustomed to those voices, those explorations may lose their freshness. But that doesn't necessarily mean that the artist has lost his/her power.

Beethoven, for instance, wrote his greatest symphony as his last. Since I'll presume that for some reason you may not consider a composer whose work has endured for centuries a musician, Paul Simon's Graceland and Johnny Cash's American IV arguably were as good as anything they ever did. And many think American IV was Cash's best album. But this was because on each the artists changed the topics of conversation that their work represented.

And I dunno but Hendrix's version of "Silent Night" probably would have kicked ass.