Many of those “Catholic” schools needed to be closed because they weren’t really Catholic. They had atrophied to nothing more than private schools for rich kids. We have many, even today, that fit that description.
That being said, what happened? This is what I think happened. Before Vatican II, most of the Catholic schools in this country were staffed with nuns/sisters who took the vow of poverty. All that was needed to support them was a subsistence wage to provide for utilities and food. After Vatican II, they were allowed the decision as to whether they kept their religious clothing (habit) or not. Many shucked their habits. All of a sudden, vocations fell. (Was the problem that they no longer displayed a life in the world but not of it?) Then, the Catholic schools started having to hire lay teachers and paying them much more than the nuns/sisters got paid. Tuition went up, many poor Catholic students could no longer afford it, and the schools population plummeted. So, they opened enrollment to anyone who could afford it. The problem with hiring lay teachers and paying them a wage that could at least in some part compete with public school teachers, so they began hiring non-Catholic lay teachers, even to teach Catholic faith in some cases! So, now, you end up with a “Catholic” school that is Catholic in name only, not even necessarily teaching Catholic doctrine, and in many cases, not espousing Catholic values. These places should close, or at least take the name “Catholic” out of their title.
Here’s a link to a great audio describing in more detail what has been part of the cause for Catholic education (and, really, public education) in this country:
alabamacatholicresources.com/church_in_the_world.html
You’ll want
by Fr. Robert Altier (and the one right under it, too) 
**School Crisis, Part 1 **