Can someone explain to me how Rousey could go from being one of the most feared people in the world to someone who can't last a minute in the ring?
The competition in the women's ranks is improving fairly rapidly. While becoming "soft" is the very easy explanation, as is often the case, when you look deeper, you are likely to find the easy explanation is far from complete (or at all accurate).
Rousey started to become a bit of a name in 2011 when she was 4-0 and booked a series of fights with then champion Miesha Tate. Tate at the time was 18-6. Their series of fights helped generate interest, ticket sales, boost broadcast viewership, and generally bring bigger paydays for top female fighters, all things which would tend to attract more female fighters and to increase how seriously existing fighters would train and dedicate themselves to fighting.
Since the two of them booked their series of fights, Tate has gone 7-12 (announcing her retirement last month) and Rousey has gone 8-2, losing both of her last two fights, one yesterday and the other 13 months ago.