The internet did several things:
1) Shortened everyone's attention spans - both those of the artists who no longer spend the same time perfecting tracks as they did in the past, and those of the listeners, who no longer listen to the music expecting it to be something deep that you should immerse yourself into. These things feed into each other in a positive feedback loop - once there is no longer demand for that kind of music, it does not get made.
2) Piracy played a major role too - if you paid $15 for an album you expected it to be worth that money and to listen to it many times over and over. So that placed certain requirements albums had to conform to to be commercially successful, and also limited the number of albums that could be released. Those constraints no longer exist. Of course, piracy has helped people discover music in a way that was impossible in the past, but that negative effect remains.
3) The internet changed the way music is made. I have no first hand observations on the process, but I read comments about it here and there in the present and stories about how the masterpieces of the past were made. And it seems that in the past the music was made with both all the MCs and the producers being present in the same studio. After the verses were laid, the engineers and producers kept working on the track until it's finished; the producer usually had some beats already made but that was not the final version of the song and there was a lot of interaction between everyone involved until everything was completed. Nowadays both beats and verses are traded on the internet as if they are commodities, and whole albums can be made without the artists, let alone the producers, ever being present in the same studio. No wonder the final product sounds like the musical equivalent of TV dinners.
4) Music can be made much more easily and with less resources and investment, and it can be distributed much more easily. This can be a good thing but it has two negative effects - it lowered the entry barriers so that where in the past only those sufficiently committed to their craft could put out albums, now everyone can put out a bunch of tracks and call it an album/mixtape, and it ballooned the amount of music available out there, thus devaluing it. Record labels could be really evil and do great harm to individual artists in the past, but one day we might end up looking back at history and appreciating the role they played as a filter that ensured most of the garbage never got a chance to flood the market. The quality of the average major label rap album in the early 90s was higher than that of the local tape sold out the trunk. There are a few regions with really vibrant underground scenes where we might have an argument over that assessment but if you take the US as a whole, it's true.
5) The internet killed the local scenes and homogenized the style. People developing their own styles in the relative isolation of some city away from the current major center(s) of rap used to a major source of creativity and new ideas, no longer.