I recall hearing that a major issue with Puerto Rico was an extreme oversaturation, it's also what killed the Georgia territory in the late-80s, for a period of time and JCP/NWA/WCW had to branch out. Essentially, Puerto Rico was churning out money, so to capitalize on it, the promoters started producing more and largely discarded the time-tested, and proper booking strategy of building heat for a return to a town. It was all or nothing in every show, it squeezed the market dry and killed off the interest.
Another aspect was probably an aging superstar roster. Abdullah the Butcher, Bruiser Brody, Tony Atlas, Carlos Colon and others were the major stars and stayed the major stars (not really Atlas but he was a big name), and with them on-top and not getting any younger, the market was pegged to them. It's a very similar scenario with a lot of the territories, especially the smaller ones like St. Louis, Los Angeles, Florida and even the AWA. Most of these territories were pegged to their old guard, Dusty Rhodes, Eddie Graham, Freddie Blassie, Verne Gagne & Nick Bockwinkel and all were the stars. They were booking themselves as the heroes, and it worked, but they never effectively transitioned away from that formula, so when they went, so did a lot of the audience.
Also, as is the case with most regional markets, the WWE and globalized/national promotions took hold. If you wanted watch 'stars', you had to watch the dudes wrestling in the biggest stadiums, in-front of the biggest crowds. It became hip to follow the bigger brands, which is why Puerto Rican promotions draw empty houses and WWE is packing thousands whenever they come by.
Btw, just a nitpick, but Puerto Rican wrestling is not like lucha, at all. Puerto Rican wrestling, along with Memphis-style wrestling, really were the trailblazers for 'sports-entertainment'. Puerto Rican wrestling was known for being incredibly outlandish, and violent. Lucha libre is a totally different style, and booking philosophy.
