Perhaps the surprise you feel is because our generation was brought up believing that Democracy was not only a necessity for social justice, but also a driver of it.

It becomes clear that the social justice developed in the West since World War Two needed Democracy to occur, but it was actually driven (if you'll forgive the market-speak) by competition between two ideologies. Once the ideological competition was replaced with an effective monopoly, there was no longer any reason to provide "good service to consumers."

On a side note, I don't know why, I think it is my pessimistic nature, but I felt this happening very soon after the fall of the Berlin wall.

In a strange way, the worst thing that ever happened to the world was the re-unification of Germany and the creation of the euro.  These events created the psychological meme of a "sclerotic Europe" unable to match the dynamism of the US. Couple this "failure of the semi-alternative model" with the removal of any ideological pressure on US elites to promote overall progress in US society (after the fall of the Sovite Union) and we have where we are now.

On reflection, I am perhaps not surprised because it was amazing how quickly the "zeitgeist" of British policy making (if not quite, public opinion) was turned around by Thatcher. We went from a partially community based society to an atomised one in only about ten years. And I was growing up in that time, so my own barometer for political change is miscalibrated to almost expect radical shifts.