The Mansfield Amendment expressly limited ARPA funding to direct military applications and gave congress more oversight into their spending. The amendment was part of broader attitude changes both inside the government and outside of it. Inside the government there was increasing discomfort with how ARPA Program Mangers could spend money on basically anything they thought was worthwhile. Unfortunately, You can’t cut off just one tail of a distribution - so these constraints definitely reduced the variance of DARPA results both positive and negative. One might think that the technologies are so broadly applicable that smart program managers could work on anything under the umbrella of “defense” but There are DARPA-style ideas that DARPA doesn’t pursue.
The economy also tanked in 1973, which contributed to congress being more concerned about what they were getting for their money. They didn’t want program managers like J.C.R. Licklider prancing around spending money that didn’t have a clear payoff. Innovation orgs need to be aligned with their money factory.
Outside the government, popular opinion turned against the military, which both put pressure on elected officials and changed attitudes towards working with ARPA. The change in opinion made university researchers more hesitant to take military money. It also may have made fewer high quality people want to join the org, which probably persists now. (Why do people become DARPA Program managers?)