Possible sources for the theory of the decline of the generations
It is possible that the source for the idea of the decline of the generations, as made plain in the question, could be attributed to the Chazon Ish, which insists on the need to follow the majority, however, the Sanhedrin is longer functioning and the Sefer HaChinnuch does not extend to include the rabbinic authorities of every generation, and the position of the Sefer HaChinnuch is a minority view at best. Not to mention that the criteria required therein are generally not fulfilled.
Deuteronomy 17:11 and “right and left”
Another possible source could be from Rashi's commentary to Deuteronomy 17:11, where Rashi states:
“even if he [the rabbi] tells you regarding the right [hand] that it is left, or regarding the left that it is right, and certainly so [you must obey the rabbi] if he tells you regarding the right [that it is] right, and regarding the left [that it is] left.”
Put differently, Jonah of Gerona (Ran), writes:
“even if it is crystal clear to you that what the court [or rabbi] tells you is wrong, nevertheless obey them, for this is how G-d, may He be blessed, commanded that we should behave towards the Torah and its commands: do as they decide for us, whether it is true or false.”
They are quoting Deut. 17:11:
"Do not stray right or left from all that they tell you"
This is why Rashi cites a Midrash, "Even if they tell you that right is left and left is right, you must listen."
But Deuteronomy 17:8–13 it talking about the authority of the levites, priests, and judges when they are baffled. It does not refer to an erroneous rabbinical opinion, it refers to judicial verdicts, requiring litigants to accept the verdict.
“you shall carry out the verdict … observing scrupulously all of their instruction to you…. You must not deviate from the verdict that they announce to you either to the right or to the left.”
A classic example of this can be found in the Mishnah Rosh Hashanah 2:9 where the Patriarch Rabban Gamaliel and Rabbi Joshua calculate the date for Yom Kippur differently. Although Rabbi Joshua eventually consented, he did not do so because he felt Gamaliel was right. He did so as a means to avoid division in Judaism. Joseph Albo, writer of Ikkarim was of the same opinion when he interpreted Deuteronomy 17. Another reason why Deuteronomy 17 does not refer to the rabbis is that the rabbinical institution did not exist until 70 C.E.
Thus, when Rashi draws his sources from the Midrash Sifrei, “even if they [the rabbis] teach you clearly” – Rashi paraphrases – “concerning right that it is left and concerning left that it is right obey them.”
But the Jerusalem Talmud, Horayot 1,1 seems to state the opposite:
“You would think that if they [the rabbis] said to you concerning right that it is left and concerning left that it is right you should obey them, therefore the Torah tells you to go right and left: if they tell you concerning right that it is right and concerning left that it is left [then you obey them, but not if they tell you that right is left].”
The Midrash remarkably omits the words, “You would think” and, “you should listen to them.” Rashi is copying an erroneous statement. Thus, the Midrash contains a scribal error!
However, it is possible that Rashi was aware of the Talmudic view and only addresses the Midrash as an opinion.
Nachmanides quotes Rashi and Sifrei, but takes one more step, writing:
“execute this innocent [a person I know is innocent]” because the Torah “commanded that I perform all His [G-d’s] commandments in accordance with all that they who stand before Him [the rabbis] … teach me to do. He gave me the Torah as taught by them, even if they were to err.”
Thus obedience is imperative. G-d places the words into the rabbi's mouths as he does the Pope. This is illogical, indeed anti-rational, as it leads people to say that the Pope is infallible and only made two mistakes in the history of Catholicism.
Additionally, Yisachar Eilenberg, the author of Tzedah laderech contends that Sifrei and Rashi are focusing on a situation where a person hears a rabbinical decree but is unsure whether they are right or wrong. But that the Talmud is focusing on the circumstance in which a person knows a rabbi is mistaken, and must not agree with him. This is reasonable. Jacob Makelberg, author of Hakhatav v’hakabala is of the same opinion.
An example of this is Rabbeinu Avraham ben HaRambam who felt that the sages were not infallible when it came to science, for example, Rabbi Yaakov Rischer dismissed the scientific claim that the earth is round on the grounds that the Talmud's position is that the world is flat. Even the Chazal were incorrect when it came to science as clearly demonstrated in Rabbi Slifkin's works.
We have seen two approaches thus far. But there is a third approach.
What did Maimonides think?
In his Mishneh Torah, Hilchot Mamrim 1:2, Maimonides writes about Deuteronomy 17 concerning rabbinical laws but avoids the discussion of “right and left” altogether in the Mishneh Torah. In his Guide of the Perplexed he writes that:
“A man should never cast his reason behind him, for the eyes are set in front, not in the back.”
Thus, Maimonides agrees with the Jerusalem Talmud.
We have seen three approaches to interpreting Deut. 17:11. The first approach insists on blind acceptance despite the error of the rabbis. The second suggests that a person should only accept a rabbinical pronouncement if they are unsure of the material out of hand. But they should not accept a rabbi if he seemingly says that black is white or right is left, and if they know he is wrong. The third approach, the position of Maimonides, states that a person should always use their reason, even questing tradition such as medicine.