I think a timeline of the "down years" would help explain what happened to the fans. This context may be transferrable to other teams and help explain why they may have poor attendance as well.
The Northlands Coliseum had an maximum attendance of ~17,000
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Edmonton Oilers
Season Attend US$ Notes
1989-90 17,008 0.85CAD * Stanley cup winners
1990-91 16,843 0.86CAD * Conference Finals
1991-92 16,179 0.84CAD * Conference Finals - Selloff of NHL players begins (Messier, Anderson, Steve Smith, Ken Linseman)
1992-93 14,797 0.78CAD * Tikkanen, Joe Murphy sold, first time a mention of selling/relocating the Oilers
1993-94 13,478 0.72CAD * Martin Gelinas, Craig Mactavish sold
1994-95 13,124 0.73CAD
1995-96 12,335 0.73CAD * shortened season. Renovated stadium, attendance now maximum of 16,384
1996-97 16,044 0.72CAD * relocation threatened if season tickets did not exceed 13,000. They exceeded 13,000. Pocklington threatens the team is for sale but never officially declares it. Playoffs return to Edmonton
1997-98 16,245 0.68CAD * Oilers make the playoffs again. Pocklington puts the team up for sale before the season is over. Local ownership purchases the team shortly thereafter.
1998-99 16,251 0.68CAD
1999-00 15,802 0.67CAD * Local ownership focuses on selling luxury boxes. Is successful in selling out all luxury suites
2000-01 15,612 0.65CAD *
Within a span of 3 seasons the Oilers had sold 8 out of their top 10 scorers from 1991-92, getting back cash for nearly all of them. Almost as soon as a player registered value, he was sold quickly as well (aka, Vincent Damphouse) The biggest dip in attendance corresponds to when 4 of the top 10 were released. The fans knew they were getting shafted pretty hard core and the drop in attendance corroborates that pretty obviously. By 1994 threats of relocation looming, a team that has been gutted and pillaged resulted in a record low attendance, followed by another record worse attendance in the shortened 95-96 season. I believe the 95-96 season is the same season Northlands renovated Rexall and reduced the seating to the "now" 16,834 by removing seats to add luxury boxes.
Threats of relocation if season tickets did not step up (to above 13,000 IIRC) to make the Oiler's profitable resulted in the creation of a season ticket drive called "Friends of the Oilers". These were not Oiler employee's or NHL employee's, but local businessmen and women that created this drive. It was successful. The Oiler's sold above 13,000 season tickets from ~6,000 and Pocklington was forced to keep his promise to avoid relocation, for that season. By the end of the season, Pocklington was not making enough money on the Oiler's to overcome the debt repayment's his other businesses required (he had some spectacular failures costing him millions). Though the Oiler's were profitable ($4-5M), they were not profitable enough and Pocklington went back to try and sell the team to Les Alexander and move the team to Houston for ~$70M US ($102M CAD). Fortunately for Edmonton, Northland's lease agreement with Pocklington prevented him from selling the team to any non-Edmonton group for 90(?) days after saying the team is for sale. A year later, Pocklington put the team up for sale. Shortly after putting the team up for sale, it was sold to the local ownership consortium.
Currency
I don't think you can pin the drop of attendance on currency for the majority of the 90's. The biggest drop in the value of the dollar coincided with the selling off of top Oiler's resulting in a "perfect storm" of fan apathy and indifference. The season ticket drive to "Save the Oilers" in 96-97 successfully restored attendance to near maximum even though the currency had still not recovered or showed signs of recovering. The currency by the end of the 90's and into the 2000's had reached a low point and this appears it may have had a minor effect on attendance (~600 fans/game) though it should be noted at this time that the Oiler's tickets were now the lowest in the NHL ($25US). So a low currency does appear to have an effect but the stadium is still high in capacity and the much more expensive luxury suites were sold out successfully.
To mimic the conditions the following would need to happen:
1) Selling your top talented players season after season for 4-5 straight seasons and receive little to nothing in return a portion of the time (we'll say 50% of the time)
2) Have the economy tank in the local area by devaluing your dollar today vs. what you spent last year
3) Have constant talks and threats of relocation for 4-5 seasons
Essentially, it comes down to an owner that is absolutely toxic to the team. I think this is why Chicago gets a pass during it's "lean" years and Edmonton should as well. Phoenix is a bit different because I felt Moye's put forth an honest effort to draw people into the seats (hiring Gretzky was a his "ace in the hole" marketing ploy through and through) but the market didn't respond.
The Oiler's, even at their worst still had fans willing to go watch the games for this terrible team and put up big money in the form of season tickets to prevent the team from moving by filling their toxic owner with enough money to fulfill a promise he made. <-- How many teams would continue to fund a toxic owner just to keep a team?
Imagine putting your team under these conditions. Imagine Pittsburgh sold Crosby. Three seasons later it sold Malkin, Staal, Letang and Cooke. It may have gotten a decent player or two back in those transactions (say, a David Krejci [Vinny Damphouse] and Nik Antropov [Bernie Nicholls]) but they are sold within a season or two as well. Your team sits between 4th and 6th last in the NHL after the selling of your prized players for 4 years. Management has made it obvious they are going to sell the team for several seasons since the sell off began and rumours for multiple seasons is that the team will sell this year to a Houston tycoon. During this time, it's becoming more costly to go to games as your dollar isn't buying what it used to. What used to cost you $66 for a ticket is now costing you $80 even though the price "didn't really" change. That is, your higher ticket price pays for the same $ salary of the NHL player you're going to go see. In the mean time, other teams are spending more on salaries because $66 to them is $80 to you. Lastly a threat, if you, the fans, don't purchase a large percentage of season tickets the team will be sold and moved this season.
http://hockey.ballparks.com/NHL/EdmontonOilers/articles.htm