So I actually wrote an article that directly argues on this point. It was published a couple years ago in an edited volume. (An aside: it grew out of research I did for my undergraduate honors thesis over a decade ago.)
The summary version is this:
California's sterilization program was always decentralized (like their state mental health system) and was implemented according to the whims of individual medical superintendents. Some sterilized (not always for eugenical reasons), some did not.
The eugenics advocates that advertised sterilization widely and promoted California's sterilization results (including in pre-war Germany) were not actually directly connected to the sterilization operations themselves.
There is no evidence that the practice fell out of favor because of associations with the Holocaust or Nazi Germany. The connections between sterilization and the Holocaust did not start to really get raised until well after California had stopped sterilizing. The connection between eugenics in general and the Nazis did not really solidify in the public mind, and being in favor of eugenics wasn't really a liability, until the 1960s and 1970s.
California's sterilization rates dropped to almost zero level in the early 1950s, not for of any obvious ideological reasons, but because the state mental health system became more centralized, ending the era of isolated "fiefdoms" run by individual medical superintendents, and a minor change to the sterilization law that made the discretion to sterilize more centralized. The guy who was in charge of centralizing it didn't think sterilization was an important operation, and neither did the new medical superintendents who replaced the older sterilizing ones when they retired. The practice ended with a whimper — it went basically unnoticed — not a bang.
The big take-away is that while we tend to view the history of American eugenics through the writings of the popularizers, these same popularizers were actually often quite removed from the actual practices of eugenics, which when looked at on independently are much more varied than the popularizers generally let on. In fact this was clear to some of the early popularizers when they looked at the structure of California's sterilization law, and they saw it as a major problem with the law, despite its high use. The California sterilization law was very, very different from the Nazi law, as an aside, in terms of who it gave the discretion to order sterilizations (or to not order them), and who could be sterilized (the California law required you to be institutionalized to be sterilized; the German law applied to the general population).