Why did the success run out so soon?

I'd say far from it. The studio output, to many, had been poor for some time, but it was the production side that was now becoming the issue.

It also doesn't help that the band was still surrounded by vultures during this period, who only cared about how much money they could swindle from the band without anyone noticing.

They were a completely different animal. '86 and '87, imho, were very rough years, but that was bound to happen with Rhino and Rich needing to properly embed themselves into the band. By 1989, they were well on the money with how tight they were on stage. 

They made the mistake of going to Nassau to record, like they did with going to Montserrat for Back To Back. It was treat more like a holiday.

Yeah I don't think running out of steam was the issue, but rather like when you're driving to somewhere you don't know and you follow someone who you think does, then you lose site of them, take a wrong turn, seems ok for a few minutes, then you reach that point where there is nobody in front of you, nobody behind you and your stuck down some country lane, in completely the wrong place, with nobody to ask for help, so you do what nature tells you to do, which is to turn around, go back the way you came and reach a place of reference.

Quo in that late 1980's period were just trying to be different to Status Quo for whatever reason, but with the same name, same live set etc, but on record wanted to be different or chase what was happening musically at that time. It was always going to muddy the waters.

I tried to liken it to Cadbury Dairy Milk in another thread, if you think of 1970's Quo or even just the 12 Gold Bars album as Cadbury Dairy Milk and the late 80's Quo on record as Milkybar, you had a situation where the wrapper said Dairy Milk, but inside was the Milkybar. 

They did what they did, sounded like they sounded, some of the singles were fine and big hits, whether that did "gain" them new fans as Rossi has said about Army I'm not sure, were these people still buying Perfect Remedy, Rock 'Til You Drop, Thirsty Work and going to gigs etc?

In that late 80's period and through the 90's too, something that doesn't maybe get the attention it should, is how many 70's Quo fans were bringing their wives, girlfriends and children to gigs, might have been you alone or you and your mate in the 70's, but now it was you, some woman, maybe a mate and 2-3 kids too. That would have had a big impact on Quo ticket sales through the 90's especially I reckon.

Mike Paxman said it well though on one of those documentaries, something like, you had this great live rock band who were great live, but were going into the studio and making the wrong albums. Pretty much sums up the late 80's period really. 

They had the fuel, they had the right engine, the right vehicle, they were just misdirected. 

If in 1986, 1988 and 1989 they'd released Rock 'Til You Drop, Heavy Traffic and In Search Of The Fourth Chord, nobody bats an eye. 

Things had gone a bit pear shaped creatively 1+9+8+2 onwards maybe trying to embrace the new decade and production techniques so 1986 wasn’t really year zero in that aspect. Up until the mid 80s Quo were probably as commercially successful as they had been in the 70s and regarding the hits but creatively dwindled somewhat. This could have been down to extensive touring post 86 and studio time got limited or short sighted recording ventures to glamorous surroundings etc. Many older acts of Quo’s genre had a lean period in late 80s and some of the 90s before turning it around for post millennium. The Rolling Stones, Mccartney, Bowie and a few others come into that category