The writing staff left after its original cancellation. Paul Germane started Recess in the interim so they obviously couldn't get him back. The new writers lacked Germane's off-key wit and made the show into something silly and conventional. Few kids shows could get away with namedropping Clarence Thomas and Saddam Hussein; newer Rugrats didn't even try that level of humor. The Godfather jokes in Rugrats in Paris are the pinnacle of late season cleverness.
I also suspect Nick consciously tried to make the show more kid-friendly after its un-cancellation. This explains the downplaying of cultural references and in-jokes, the escalation of toilet humor and malapropisms (did anyone say "diapie" prior to the '97 season?), the more childish voice work, downplaying the adult characters (arguably the best part of the '91-'94 show) and the new characters.
Ironically, this may have doomed the show. Rather than a crossover show like the early years, Rugrats became strictly for young kids. I'm sure most kid viewers didn't mind but the sizable teen/adult audience lost interest. My parents loved the early seasons as much as me and my brothers, but couldn't stand anything after the movie. Even kid viewers moved on eventually, especially with SpongeBob and Fairly Oddparents coming out around the same time.
As obnoxious as Dil and Kimmi were, like most new characters they're symptoms of decline rather than the cause. The show in its prime wouldn't have added them in the first place; they're just an obvious attempt at a "new" angle and to sell merchandise. I won't even touch All Grown Up.
"Haven't they replaced you with a coin-operated machine yet?"
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