What went wrong?

Skrillex conspiracy theories are unironically my favorite thing in EDM

nice fantasy but completely false.

noisia did in fact help sonny moore develop his synthesis chops, but his signature growl sound was his and his alone. He took many concepts and brought them together to create it, from simple formant EQ modulation, to the very basics of re sampling.

He is actually a very competent and well versed musician/producer. I've seen him work, been around many others who mentored him, from John Dadzie, to the main dudes themself, Noisia.

The reason his later work avoids this is because he's attempted to step away from this sound in a very smart move to grow. He was the foundation for the americanized dubstep movement, as jauz is the foundation for the dubstep garage hybrid that is "deep house" today.

It all went wrong after the Damien Marley collab.

It would have been cool to see him fuse IDM with brostep or to try producing less wall of sound shit and go with a more minimal sound.

The majority of his shit is mediocre normie core, I just wish he would try something risky instead of just appeasing his fans.

As I said, the specific narrative this text suggests is probably made up. Seems to me like Mau5 and the others that were mentioned don't view Skrillex as a villain or a traitor of any sort. Plus, as you said, the real reason for his label change is known already. His follow-ups definitely do not have the same sound - that's the main reason this theory makes sense to me. Of course he threw some basslines from Scary Monsters on his boring edm tracks, he wasn't going to abandon the shtick that got him famous, but going from the virtuosity of his debut to the washed up, tryhard 'bass drops' on his later work just doesn't have any other explanation.
Beyond that: it's hard to tell how (and if) any of that went down. Joel would obviously never admit it, but in the very least Skrillex got babysitted through the making of the album - if nothing sketchier.

So how comes his current work isn't just poorly written, but poorly produced? No man who controls sound as efficiently as on Scary Ghosts would make his current work, which sounds like he just throws in the default of whatever he torrents.

Clearly dealing with someone who doesn't understand what he's saying

On what level is it "poor"?

In terms of mixing, mastering, and overall polish, his newer work is x10 better than anything on Scary Monsters. This is undeniable, as a matter of fact he's widely regarded as one of the few producers in EDM that can destroy dynamics yet preserve transient quality, max loudness, no mud. Second only to Noisia.

When it comes to sound design, his influence on the industry as a whole is apparent, during the scary monsters days, the only option out there to replicate his sound was by following the same steps he did, which were extremely tedious. A demand grew for a simpler FM synthesizer, or a wave table synth with a higher degree of flexibility, hence the origin of Serum. Skrillex is obviously still capable of creating these sounds, you hear dashes and hints of it throughout the album and his recent work, not only that, but despite the "simplistic" sound of his more modern iterations, they still require a technical know-how no different than that of an expert level producer. The reason you don't hear giant growl expositions anymore, is simple, they're just not popular, he's following a new sound with his dubstep, the sound of trollphace, the sound of riddim.

Unless you plan on contributing anything that isn't mindless speculation I suggest you stop now and think long and hard as why you're so keen on spreading largely false stories of something you don't understand.