I too saw the softening of the culture first hand, in the sixties and seventies. By the time I exited Catholic high school, it was adrift with nuns who yearned to be hippies and the new young priests were clearly mincing, not to say homosexual.
The rise of cafeteria catholicism ensued, and I haven’t heard a good solid sermon in years. Hand holding and pop music replaced worship, and you’re right: capitalism had no part in the problem. Rather it was PC group think, and liberal catholics who desperately wanted inclusion in the cool cliques.
Face it, Catholic isn’t cool. What’s more, it should make NO ATTEMPT to be cool.
You are on the mark. By the way, did you notice that the priests most eager to be ‘with it’ later seemed prominent among those in sex abuses scandals?