I would agree with your post in regards to his first season. He was decent enough, but just didn't have the ability or physicality to do more than that.
Second season he declined massively and that seemed to be more a mental issue. His confidence or belief seemed shot. How much of that was his off-the-field problems and how much was the 'pressure of playing for Man Utd', we don't really know. Purely at a guess, I suspect the former may have started it but then the latter exacerbated it to the point he couldn't pull himself out of the spiral.