I think once the Owner's intentions were known that he was going to get rid of big contracts, plus the failed trade of Chandler to OKC, that had to demoralize the players. They seem to go into big spiral. What a turnaround from a year ago when they looked like that had tremendous topside potential.
NO lacks reliable go-to scorers (really, none outside of Paul and West). Stojacovic isn't in his prime anymore and Chandler basically feeds off of lobs from Paul. The rest of the guys are role plays who add certain things to the team but not much in the way of creating offense on their own and causing matchup problems.
If you take away Paul's ability to penetrate, you've basically cut NO's balls off.