The state of archaeology was (is) very poor. The 1970s was the heyday of archaeology in Iran, especially in the southwestern region of Khuzestan, and it was also a time when Iranian-born and Iranian-trained archaeologists were beginning to take a more active role (or were allowed to), from their own field schools. Tehran University's archaeology department was becoming the natural hub for modern, systematic, academic investigation of Iran's incredibly rich sites, with frequent collaborations with established western archaeology departments. All of this came to a screeching halt in 1979. The Revolution closed the university, and also the old government's Central Bureau of Archaeology. Such activities were deemed frivolous and "western." The result was a complete vacuum of authority over the country's heritage, and especially the protection of that heritage. Sites were looted with impunity, spreading Iranian patrimony all over the globe via illicit channels. Farmers bulldozed ancient mounts, and even Persepolis was under threat of destruction. War with Iraq followed the next year, and, needless to say, academic access to Iran from outside evaporated, especially from the West.

The consequence of 1979 was that older archaeologists, barred from excavation, began to publish and reflect more on their pre-Revolution work, and younger archaeologists wound up going elsewhere and focusing on other sites. Fewer new archaeologists came up in the universities with focus on Iran. The field, in short, took a hit, but enjoyed a lot of publications and symposia and such in the 1980s and early 1990s. By the mid-90s things were beginning to thaw a bit, with the Oriental Institute at Chicago being allowed a "foot back in the door" so to speak. Since then, there have been a good number of projects including western archaeologists in the country.

Kamyar Abdi has a good write-up of this question in the American Journal of Archaeology: "Nationalism, Politics, and the Development of Archaeology in Iran" (105.1, 2001, 51-76).