The crazy stuff started right after the Iraq war was finished. People no longer had a reason to be nice to each other. They were left 'wanting' all day long. The country was considered to be 'in ruins' (when it wasn't) and everyone was full of demands. That's when everything started going to shit.
Then came Khatami's era and this allowed some of the more educated layers of the society to enjoy relative peace and regular entertainment (music, parties, some concerts) among themselves while the uneducated, poor and deprived masses took their frustrations to stadiums. This started a whole new culture of LASHO LOOSH BAZI.
It's been exponentially going downhill since.