Ever since the 9/11 attacks, there has been a sudden drop of demand in air travel. Passengers have become afraid to travel, so there are less people traveling. Airlines are also losing quite a bit financially, and are retiring old, not fuel-efficient aircraft quickly like the 727 (which will be greatly missed).
Airlines have also been cutting down in operation by laying off workers or furloughing them. Airlines have also been reducing there schedules by either fewer flights, or completely dropping the destination.
Therefore, there is no need for as many aircraft. Thats why airlines have been retiring more than they are ordering.
Airlines are also retiring or temporarily decommissioning large aircraft like the 747 which there is not much demand for these days.
Its a sad time for air travel. Hopefully it will pick up.
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran