I know what you and other people are thinking, that the answer to this question is "loss of technical proficiency." While that is true to an extent, that's only half (frankly I think a third) the answer.

It has more to do with the ideology of image representation. The association of fine detail with technical skill in the classical period is because there was an artistic preference for "accurate representation" as the pinnacle of skill in that time period.

This changes significantly in the 3rd century onward with all image representations (look at busts of 4th-5th century emperors) and you see heavily stylization into an abstracted uniformity of look. The tetrarchs are a perfect and one of the earliest examples of this. That's because the artistic preference for "accurate representation" gave way to the style for abstraction, namely an artistic ideology that expressed commonality rather than difference, which was sorely needed as a unifying political ideology in the aftermath of the 3rd century.

As a comparison, consider this. Do you think Picasso is less "technically advanced" than Raphael because his most popular paintings seem unable to draw a human form accurately? No. It has nothing to do with Picasso's skill, but everything to do with the circumstances for artistic consumption.

This is exactly what happened with late antique imagery, and late antique coinage. Interestingly enough, it took the modern abstract art movement in the early 20th century for art historians to finally re-evaluate late antique art as something other than the "decline" everyone previously assumed. And it was this re-evaluation that the term "late antique" was first coined as well.