The main reason Boeing have fallen so far behind is because while their competitor has been offering new state-of-the-art designs, Boeing have been rehashing old designs such as the 737NG, 747X, 757-300, 767-400, all to no great effect (737NG has done OK, others have all been complete failures).
The reason they've been doing this is the 'Shareholder Value' craze which swept Wall St. All that mattered was the share price. If the share price was strong, Wall St loved them. I think there was a hostile takeover bid by a corporate raider in the early 90s as well which cemented in Boeing's collective mind the importance of a high trading value.
Now the shareholder value thing has been shown to be the nonsense that it is (wait for another WorldCom-size scandal in the pharaceutical industry any day now), investors will (one hopes) be more willing to see a company make long term capital-intensive investments necessary for developing new product lines of the scale of the A320 or A380. That's what Boeing need, they'll never sell more than a dozen 747XERLRwhatevers, the 767-400 is dead in the water and the 757-300 probably isn't looking any better.
Boeing need some new products fast or they may as well stick to making things that blow people up. The 777 alone won't keep them in the civil industry any more that the L1011 kept Lockheed in the civil industry. Very sad to see such a once-great name disappear, which is surely what will happen if they don't start spending some money and committing to some major new product lines. Will the shareholders allow it? Hopefully after recent scandals, they will.