Ditto - am flying with my family (5 of us) from the UK to Australia and back in business class in the summer. We booked with Etihad expecting one of the best business class product in the world but it seems that economic realities are hitting the airline and it is not what it was a couple of years ago. That said:
1) I don't think the cost cutting is unique to Etihad by any means
2) it is all relative - I guess Etihad is starting from a higher base than carriers like BA and at least it still has a good hard product, new aircraft etc.
3) the fare I paid was ridiculously low versus BA, Emirates, Singapore Airlines, Qatar etc. (around £2.5k per person for U.K. to Sydney and back from Melbourne to the U.K. in business plus a couple of free internal flights with Virgin Australia). Personally I'd rather save the money and sacrifice an amenity kit and some fine wine...but I get it that corporate travellers will be less happy if they are not personally benefitting from the fare savings.
4) at least you can reserve your seats free of charge, unlike with BA that seeks to fleece you for the privilege!