In 1960, 75 percent of college instructors were full-time tenured or tenure-track professors; today only 27 percent are. The rest are graduate students or adjunct and contingent faculty — instructors employed on a per-course or yearly contract basis, usually without benefits and earning a third or less of what their tenured colleagues make.Whether this is a positive or negative development depends on one's perspective. The ostensible purpose of tenure was to protect scholars from retaliation for publishing unpopular ideas (see, e.g., this explanation from the University of Missouri's Faculty Handbook). However, academic (as distinct from judicial) tenure has always had its critics, including Francis Fukuyama who contends (here) that the social benefits of tenure are not worth the social costs. Peter Lattman argues (here), with substantial justification, that tenure mostly "shelters the lazy and the pedantic. They alone seek refuge in academic sinecures. Active scholars will find a home somewhere." Writing in the National Review, Stanley Kurtz has argued that tenure should be abolished because it has turned "academic freedom" into a form of "ideological exclusion," which has destroyed "the campus marketplace of ideas." In his view, tenure is the cornerstone of political correctness, which is of course the opposite of tenure's original purpose of protecting unpopular (that is, politically incorrect) views.
From a market-based perspective, tenure is nothing more or less than a term in an employment contract, which colleges and universities offer, in lieu of higher pay, to attract and retain top scholars. Assuming that the elasticity of demand for scholars is reasonably normal, one would expect that tenure and higher pay levels would arise when the available supply of scholars is relatively low. So, perhaps the trend Ms. Stainburn reports simply reflects prevailing market conditions in which the supply of scholars is high relative to demand for them.
Empirical evidence exists to support that hypothesis. This 2005 study from the National Opinion Research Center at the University of Chicago reports that the number of doctorates awarded in the US tripled between 1961 and 1971. 1961 was the first year when the number of doctorates awarded exceeded 10,000. In 2005, in the total number of doctorates awarded exceeded 43,000. While the number of academic jobs almost certainly increased during that same period - I have not been able to find sources on the growth in the number of academic jobs in the US - it seems reasonable to doubt that the growth rate in the supply of academic jobs has kept pace with the growth in the rate of scholars with doctorates. If so, then the bargaining power of scholars has probably diminished, which alone could explain the reduction in tenured ranks.
Whatever the cause, it's not obvious to me that the reduction in the tenured ranks is a bad thing either for colleges or for students, particularly if it retards the rate of growth in the cost of education, although it surely is bad news for those who make the effort to obtain PhDs. As Ms. Stainburn points out at the end of her article, there's scant evidence that well-qualified PhDs without tenure are any worse as classroom teachers or scholars than those with PhDs.