Lots of reasons for the poor teams, but not a small population base, the Phoenix metro area is one of the fastest growing in the country.
Lack of continuity in coaching has hurt teams the last several years. The Cardinals fired two of their best coaches after each had been in Arizona less than 2 years (Stallings and Ryan). Both were somewhat successful their first year, but got canned at the first sign of a downturn. They fired Vince Tobin after 7 games in 2000 despite his having led the Cards to their only playoff win since 1947 during a surprising 10-8 1998 campaign.
Look at ASU football. The program hasn't really been a national power since the first half of the 70s, but has had its ups and downs. Larry Marmie got fired after his fourth season in 1991 despite showing improvement from the previous year (4-7 to 6-5), just because his contract was up and the boosters were restless. Bruce Snyder took ASU to an 11-0 regular season and a Rose Bowl eight years ago, and got canned in 2000 even though his team went to bowl games four of his last five years. Now the program is much weaker, but the coach Koetter (who has started worse than his predecessors at 17-20)has been guaranteed his job for 2005 no matter what happens this year (because ASU really can't afford to buy him out, having spent all that money on Snyder's buyout).
Too much looking at short term $, attendance problems and impatience with winning in the postseason has really hurt. The Coyotes were a winning franchise a few years ago, but attendance wasn't enough to justify some of their high priced players so they got traded. The Coyotes also fired two head coaches with winning records their first three years in Arizona, even though they made the playoffs each year.