OK, that could definitely work. There definitely must have been a serious Dark Age period between this point and the New Sith Wars.
I am not speaking of the destruction of the Republic. It's more about it losing a lot of territory and succumbing into its dark age.
Putting on more restrictive laws and social policies which are causing the technological drawback in the time ?
But with the technology thing I will agree. It's ridiculous! Old Republic and New Sith Wars are so much different. We have super weapons that are nearly as powerful as the Death Star (Desolator), powerful exo-suits (Sith Warrior with tanks on his shoulders which are constantly pumping stims into him!). We have properly geared army and we don't have half-naked melee infantry :l
Also look what happened to our own world. We had our own Dark Ages before the revival of ancient ideals, arts and sciences which were nearly forgotten and even prohibited in many cases.
There is always some cycle going on. :l And the Emperor wants to stop it once and for all.