It's the opposite actually. Federer has been improving each year. His footwork is what he's improved the most and this has translated into less errors in his game. The problem is guys like Nadal, Murray & Djokovic from Tsonga to Soderling have also been improving. Chumps like Roddick, Safin, Hewitt, Agassi, Nalbandian provided no challenege for Federer - hence why Federer struggles to beat guys as talented as himself (because he was caught off guard and couldn't deal with sudden challenges after playing chumps for years).
One of the things that Federer has improved the most is the forehand. Yep, it's not as strong as Djokovic's, Nadal's of Murray's but it's definately in the league just behind it (with Tsonga and Soderling) . Murray I think beats Federer in the forehand department simply because of the angles he can produce.
His backhand is as good as it was when Federer was supposedly better than ever (rofl....to think Federer's 05 level of play trumps 08+).
His serve has also improved, it's now a weapon singularly now.
His return....His return has improved. Guys like Roddick have good serves, but the game has improved on so many levels, Federer can break Roddick two or three times back in 05 but there are so many better servers (and players come to think of it) than Roddick. Someone like Tsonga is one - Federer was hopeless against him at Wimbledon due to Tsonga's serving ability. So again, Federer's return is good and was good against the average servers but not against the brilliance of the current generation.
To summarise, Federer is playing his best tennis ever each passing year and continues to improve. The fact is so are others who can play at a level as high as Federer. Federer didn't benefit from playing mediocre opponents and is now paying the price for it by not being able to step up to challeneges.
Federer's 2011 level would have seen him win all four slams in 2004 and 2005. Maybe even 2006 and 2007.