Sugar Ray hadn't fought for 3 years before facing Hagler. Even if he declined a bit, it should be nullified by Leonard's inactivity.
It also has to be said that Hagler fighting orthodox in the first few rounds probably cost him aswell. So it's not only Leonard's tactics I would say Hagler's tactics let me him down also. Hagler in some of his big fights didn't always have the right gameplan. Against Antuofermo in their 1st meeting he let the champion take the play away from him in the later rounds. Against Duran he fought too tactical and let that fight be closer than what it should've been. But that's no excuse Hagler chose to fight that way in the early rounds against Leonard and it cost him dearly. I also agree with @MaccaveliMacc that Leonard was the one coming off a 3 year lay off and fighting at Hagler's best weight. So that certainly evens it out with Hagler being a bit past his prime. It also has to be said that not long before the Hagler fight, Leonard apparently got knocked out on his feet in sparring against Quincy Taylor. And that sparring session may of in hindsight won Leonard the fight against Hagler. Because apparently Leonard was going to fight more aggressively vs Hagler and the Taylor sparring session changed Leonard's gameplan.