[nixcity]

What reduced service so much?

They run more buses now than they ever did.

They reduced service along the most key corridor, more buses don't necessarily mean more service. And of course they would run more buses the population is growing....
Although I will say it seems like they are finally getting the message over the past 6 months or so by FINALLY decreasing wait times (increased frequency).

Massive fare increases.
The increasing gentrification of Austin, replacing transit-dependent populations with non-transit dependent populations.
The increasing sprawl of Austin (the population growth we're seeing is mostly on the outer fringes).
Continued parking minimums in Austin, leading to the infill development not actually being all that transit-supporting (e.g. replace a pre-war building with no parking with a duplex with 6 parking spots).
UNO, which moved a bunch of students adjacent to campus, replacing a bunch of transit trips with bike/walk trips.

Idk what isolated bubble you live in but these issues are occurring all over the country, a friend of mine aptly labeled us as a gentrification nation. Here is an article showing that despite these issues many cities are seeing an INCREASE in ridership, not the 7.7% decrease we saw. There is just a 1% decrease nationwide.
http://www.apta.com/mediacenter/pres...ridership.aspx

What other bus system in America has increased fares 350%

350% my ass, the most used form of buses increased by 25 cents, an effing quarter.
http://www.capmetro.org/news-item.aspx?id=4431

Other cities with similar increases.
http://www.nj.com/traffic/index.ssf/...cates_say.html
http://mta.maryland.gov/new-fare-pricing
https://www.sacrt.com/fares16.stm
https://www.cityofmadison.com/metro/fareincrease/
http://www.soundtransit.org/heads-ri...hanges-march-1
http://goldengatetransit.org/farepro...-july-2016.php
http://charmeck.org/city/charlotte/c...is%20Final.pdf
http://www.wakegov.com/planning/tran...se%20Flyer.pdf
https://www.bostonglobe.com/metro/20...WnK/story.html
http://www.huffingtonpost.com/news/cta-fare-increase/
http://www.cleveland.com/metro/index...rvice_cut.html
There are more but this is getting boring. And most of those cities had already higher prices than what we still have. In case you haven't noticed prices for things generally get more expensive, its called inflation. Here's some info. showing how NYC's fares started at 5 cents in the early 1900's and have now risen to $2.75.
https://en.wikipedia.org/wiki/New_Yo..._transit_fares

It's not horrible, it's massively successful on any objective measure for a commuter line (as shown by electricron's figures)

Yeah, massively successful, as in 22'nd out of 28 commuter rail systems in the US, lol.
https://en.wikipedia.org/wiki/List_o...s_by_ridership

(and again, it doesn't "eat up" the budget, it carries the budget

It accounts for almost 9% of their operating budget.

Do these people even do math?

Did they total it up, and figure out what the tax increase is necessary to pay for everything they're asking for?

Or did they simply ask for everything and a pony as well?

That's not the point, of course they know they couldn't get all of that. The point is that yet another city agency (and now the Hyde Park NA) all want rail to happen and for this year's bond. And where is city council on this, oh yeah, I know, widening roads as usual....so they will look like Slaughter or Braker. But hey, if you show a rendering with nice trees planted it sure does look cool, oh yeah, and bus pullouts, another attempt at something proven to not work.
http://www.austinmonitor.com/stories...-bus-pullouts/

Addendum: As far as UNO goes.....when was ridership highest along that corridor??? Oh yeah, right before they decreased service, UNO already had well over a decade of growth. As I've pointed out before these students don't just go to class and then home and study all the time. They have lives outside of there which is one reason why despite the decreases in service this corridor still far outperforms all others.