I think it is because Mio was never that deep of a character to begin with (granted, none of them are), and most of the embarrassment gags have been done in the first series.

I think it is more of a burn-out thing. The other characters are managing to play into their eccentricities to pull out laughs, while Mio has been, well, Mio, which was good enough before but not when everyone else has stepped up their game.

However, we must not neglect that Mio is still fulfilling her role in the series, or to be more accurate, she is finally able to get the role that she wants, which is to support the others without standing out. If we remove her and Azu-nyan's straight man comments, K-ON would indeed be pure moe without the comedy, something I would not waste time on. The rest of the main cast are boke after all.

Because of this and her still awesome character design (Yomi fan here), I cannot rate her any less than the rest of the cast, so:

Mio=Ritsu>Yui>Mugi>Azusa

I just think Azusa is too Mio-like, which is fine if the character didn't already exist in the same series. Eyebrows pull Mugi lower than what she actually deserves as a character. Ritsu made a comeback for me in season 2, proving to be a lot crazier and more interesting than I ever thought she could be.