My totally amateurish explanation: the post office tries to do too much. It should deliver mail and possibly sell stamps to collectors. Instead, it tries to be a greeting card shop, gift shop, and office supply store. If you stand in line at the post office, you will see customers picking up the boxes and supplies that the USPS sells, and walk out with them unpaid. The walls will be filled with books, framed art, and compact discs that are being sold for 50% or 75% off because the post office committed to buy more than the market can bear.

When mail volume was low in previous decades, the post office was still able to break even while promising to deliver to every address in the United States, no matter how remote. I don't think declining mail volume or the cost of postage is to blame for the budget shortfall.