Simple explanation: Dugtrio was good when it had arena trap. Dugtrio doesn't have arena trap, so Dugtrio is now bad. Dugtrio is now bad, so it dropped to PU.
Explanation in terms of what I know about Smogon OU: Smogon bans things from OU in attempt to solve certain problems. In this case, the problem was that Dugtrio could trap a lot of things and a lot of strategy ended up being about using Dugtrio correctly. Other strategies and skills mattered less when everyone was using Dugtrio, and apparently Smogon doesn't like when that happens, so they decided to do something. For whatever reason, they decided that banning arena trap the ability was a better solution than banning Dugtrio the Pokemon. It might have been because it was more concentrated, or the thing dissolved in it was more useful. No matter the reason, the solution they chose was banning arena trap. So arena trap was banned. This was already enough to solve the problem, so Dugtrio was allowed to stay in OU. And because its only good ability was banned, people stopped using it, so it dropped to PU.