Q: Did MIT's decline (outside of biology and life sciences) begin shortly before WW2?

The democratization of electronics -- made possible by transistors and integrated circuits, among other things -- surely contributed to a decrease in relative prominence for MIT, but the institution and people in close orbit had many groundbreaking accomplishments in electrical engineering and computer science since World War II.

Looking at EECS only, consider MIT's dominant postwar role in:

• Magnetic core memory
• Navigating to land on the moon (http://www.technologyreview.com/...)
• Chaos theory and the "butterfly effect" (which earned Edward Lorenz the Kyoto Prize in 1991)
• Time-sharing and operating systems (Corbato won the Turing Award in 1990)
• Artificial intelligence and neural networks (e.g., Minsky's groundbreaking work)
• Object-oriented programming, information hiding and abstraction (considering, e.g., Liskov's 2008 Turing award and 2004 von Neumann medal)
• RSA
• GNU
• X
• The packet-switched Internet (consider, e.g., Bob Kahn's Turing award in 2004)
• LOGO
• E-Ink
• The spreadsheet (Bricklin and Frankston's VisiCalc)
• High-definition digital television (including the work of Lim and Schreiber, and MIT's role as one of four voting seats on the Grand Alliance)
• Languages and automata (e.g., Chomsky's work)
• Information theory and coding, including Shannon's revolutionary master's thesis in the 30s and his work as an MIT professor from the 50s on
• The rise of "hacker culture" (see Steven Levy's "Hackers") and the digital video game ("Spacewar!", much later "Rock Band" and "Guitar Hero")

• Programming languages, including McCarthy's LISP (still used more than 50 years later)