You are right that average field size hasn't fallen off...though, that may be due more to the big increase in foal crop size since the 60's.
In 1960, the average field size was 8.95 and the average starts a year per horse was 11.31
In 2003 (most recent year I have stats for) the average field size has dropped mildly to 8.30...the average starts per horse have declined to 6.62
I believe the breeding industry has played a chief role in this long-term trend, but, I'm also think the medication (legal and illegal) have as well.
According to the '04 ARM, 2-year-old races made up just 7.7% of the races run in 2003, and the average 2yo made 3.3 starts.
I think less medication might be greatly to the benefit of the sport.
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