I don't know if I agree that things went downhill after Palestrina. Victoria (his pupil), Byrd, Sweelinck, Purcell, Monteverdi, Schutz, Bach - the whole Baroque period has some great stuff. And even the Classical period, despite its refocus on secular music, has some great church music and much of it is appropriate for Mass (how can we leave out Mozart?).
My personal opinion is that things started going downhill after 1805 - generally the big guns of the Romantic era do not produce appropriate music for Mass (there's still some good stuff - e.g. St-Saens' and Bruckner's choral work. But you have to pick and choose).