While it did exert a great deal of power in Oaxaca, Monte Alban’s influence was mostly in the valley of Oaxaca and the Cañada region, northwest to the valley. Some scholars, particularly around the figures of Kent Flanner, Joyce Marcus, Charles Spencer, Elsa Redmond, and Andrew Balkansky have try to push for a predatory- warfare model labeled as the Zapotec Imperial Hypothesis (ZIH), which argues that Monte Alban was the center of a territorial empire that conquered a great deal of the what we now called as Mexican state of Oaxaca. In their favor they use mostly two lines of evidence, the geographical expansion of graywares, and a unique reading of what they called “Conquest Slabs” embedded in Building J at Monte Alban. However, under closer scrutiny, the ZIH does not hold for most areas except perhaps for the Cuicatlán Cañada and maybe, but this is a big maybe, the Sola de Vega, Miahuatlán and Ejutla valleys south of the valley of Oaxaca. This is no to deny the fact that Monte Alban was a very powerful polity that may have controlled the political landscape of the valley. However, other polities like El Mogote/El Palenque (this Mogote is in the Valle Grande no in the Elta valley) remained, at least for some time, independent and in constant conflict with Monte Alban. So the real nature of Monte Alban’s influence needs to be better contextualize by phase and look at more carefully in specific areas. For example, contrary to what the ZIH predicts, there is no evidence of conquest in coastal Oaxaca

Now, to answer your question, the short answer is that the causes for the collapse are not well understood, but some evidence points to the fact that by the late Classic, Monte Alban’s nobility were becoming increasingly isolated from the population. This can be seen in the newer constructions that secluded the main plaza that it seems like it was transformed into a more elite place disenfranchising the rest of the population. This might have caused social upheaval and eventually the demise of the city. Also, at this point, Monte Alban faced stronger opposition from other polities around the valley like Lambityeco, Jalieza, and Macuilxochitl. However, the main problem is that this liminal part of the chronology is no well understood, particularly the Early Postclassic Liobaa phase. While some people have greatly advanced our understanding of the previous Xoo phase (like Winter, Markens and Martinez), until we have a better understanding of what the Liobaa phase looks like, our knowledge of the collapse of Monte Alban will be highly limited.

Contrary to what a lot of people believe, there is still tremendous amounts of questions in the valley of Oaxaca that we do not have good answers for. I would recommend you reading the book Mixtec, Zapotecs, and Chatinos by Arthur Joyce since it is the most up-to-date overview of research in those three areas of Oaxaca (although some aspects of it are already slightly outdated). Also, anything by Marcus Winter is great if you want to learn more about Monte Alban.