Then the rate of improvements fell off a cliff
That's only true if you're only judging it by outright speed, height, etc. Things have continued to improve in terms of efficiency, thrust-to-weight ratio, noise, cleanliness of fuel burn and above all, reliability.
The original RB211 turbofan (the first big fanjet of the type that all modern airliners use) had a total lifetime of 1,000 hours. Nowadays it's >33,000 hours. That's an incredible achievement. In 1970, as a young kid with a keen interest in aviation, I would watch Boeing 707s fly in and out of my local airport, all trailing plumes of black smoke, all whining loudly (and deafeningly, on take-off), and understanding where all the noise protesters that frequently appeared on the news were coming from. Nowadays you don't have that, because noise is just not the problem it was, there's no black smoke, and jets slip in and out of airports really very quietly, when you consider how much power they are producing (which in turn helps them climb away more quickly).
As far as computing is concerned, you're right - there's still plenty of room at the bottom. But the current fabrication technology is reaching its limits. Perhaps jet engine manufacturers in the late 60s couldn't see how they would overcome fundamental limits in materials technology to produce the jets we have today, but they did.