By the time Granada was buying other franchises it wasn't the Granada of old, it was run by caterers...
The rot set in around 1992 when David Plowright, Chairman of Granada (and a key proponent of quality ITV production) resigned when Gerry Robinson became Chief Exec. (Robinson knew nothing about TV...)
I'll give you an idea, Denis Forman (former Granada CEO up to the mid 80s) said that Granada's top priority was to make good programmes, making money came second. I read an interview with Charles Allen and he was quoted he was proud to have turned Granada from a company that didn't make that much profit to one that made £250 Million profit in one year during the late 1990's.
The so called downfall is down to many factors, I won't bore you, but Sky, Internet, DVD's, Computer games, people with more disposable income, the rise of the Independent sector have all played a part of the changing of ITV. I would love to see the old ITV back, but it's never going to happen, I just hope we carry on with this happy medium (If you want to put it like that) for now, where we still have a good quality service and still have a full News service too.