One way I think the L3 candidate pool may have changed, is that (and this is just a hypothesis based on various bits of anecdotal information), over the years, more and more people seem to be taking the exams very early on in their career and often prior to amassing much work experience. Levels 1 & 2 are much more quantitative and are (I feel) quite accessible to smart students that put the studying effort in.
Level 3 is much more nuanced and this is where a bit of industry experience may make a considerable difference.
Why has this happened? First off, the charter is more widely known of these days, and people who are planning an investment-centric career will set about it early on. Second, the job market is very competitive now, and some sort of CFA status is becoming a basic requirement to keep your resume from getting trash-canned right away. Finally, more and more people seem to be using the CFA program as a way to facilitate a career change.
I fell into this last category. As an engineer, I had embarked on the CFA program after completing an MBA. I found levels 1 & 2 tough, but relatively straightforward to pass. Level 3 was much tougher for me at the time… Basically I had the math skills etc. for the quantitative stuff at 1 & 2, but felt very unsure of things a L3. Now that I have made the transition, I find much of L3 material seems far less murky and if I had to write it again, I think it would go much easier, simply because now I have some industry experience (coupled with all the interactions/conversations with others working in the industry) which all build up a basic “feel” for the investment world.
So, you have a candidate pool that can do the “number crunching” through levels 1 & 2, but then may falter at level 3. This may not explain all of the decrease in passing rates (or any of it), but it strikes me as being relevant.