A little bit of both.
http://musclecars.howstuffworks.com/...cars-work7.htm

The Death of Muscle Cars

In many ways and for many reasons, America lost its innocence in the 1960s, and no-holds-barred performance cars were just one casualty of wrenching social changes. Muscle cars began fading away in the 1970s. Most were gone by mid-decade, victims of a changing market and increasingly strict government regulations. A precious few managed to hang on longer, but only as meek reminders of their '60s selves.

The decline was perhaps inevitable. Demand for big, fast, thirsty cars dried up as rising gas prices and hefty insurance premiums had many buyers looking at thriftier, more affordable Detroit compacts and imported minicars. At the same time, progressively tighter limits on tailpipe emissions forced automakers to detune engines via lowered compression ratios, fewer carburetors, more restrictive intakes, and other power-sapping measures. New Federal Motor Vehicle Safety Standards called for adding crash-protection features such as bigger, sturdier bumpers that added performance-sapping weight.

While these harsh realities compromised all cars to some degree, muscle machines fared the worst by far. They did, after all, have the most to lose.

The Last Great
Muscle CarsFor profiles, photos, and specifications of some of the last great muscle cars of the classic period, see:



Signs of loss appeared as early as 1971, when General Motors' engines and some Chrysler Corporation mills were recalibrated to run on regular-grade gas instead of premium. That same year, GM switched its advertised engine ratings from gross figures to more-realistic net numbers, which made the power and torque losses look even worse on paper. American Motors, Chrysler, and Ford followed suit for 1972, when many engines were further detuned for newly required low-lead fuel.

Then, in October 1973, the Organization of Petroleum Exporting Countries (OPEC) drastically curtailed oil exports to the United States, touching off a national energy crisis marked by widespread fuel shortages, record gas prices, and long lines at the pumps, among other discomforts.