In the 70's, many movies were grim and dirty... 007 was seen as a spectacular escape from normality. People going to Bond back then were expecting Star Wars, not Das Boot.
Over time things changed. Ripoffs, inspirations, poor substitutes, countless comedies ripping on the "Bond" formula, meant the formula itself was somewhat stale. Then with real terrorism jumping front and center into the news, and people's flying habits, all conspired to make a "hard serious sorta-real" (Das Boot) Craig era a success.
Dalton's downfall was simply timing: the public was still in love with the campy Moore era. Had Dalton done his first Bond after 9/11, he might have done six movies.