-- Columbus was from a competing city-state in Italy
Also, as an artist I am sure you are familiar with the shift in financial and cultural power to the medici-backed city state of Florence during the quattrocento. While the art and culture of Venice stagnated, and largely just reflected its more medeival and eastward focus (still on byzanyium etc.)
So the legitimate question follows: why was innovation happening in close proximity to but outside the auspices of, Venice? When they had so many advantages (first mover, cash flow, ect). Classical Rome was also a city state, but with a more expansive and inclusive (citizenship, etc) worldview.
Venice was a trading empire. Its empire became worthless. To bounce back from that would have required a transformation unprecedented in history. In fact, even knowing the history that followed, if I had been summoned back by time machine to advise the council about what to do to repair Venice's fortunes, I probably would not have been able to give them advice that would have worked, short of telling them about all the scientific and engineering discoveries that had been made since, and sending them off on a Riverworld-like future.
That said, you're right that Venice was a trading empire, so losing that competitive edge hurt them a lot more.
It didn't help, either, that at about the same time, the whole Italian peninsula became a prize fought over by the now very powerful kingdoms of France and Spain. City-states in general were becoming obsolete.
Maybe there is some sort of badness going on in the US, but almost any other failing empire would have made a better example than Venice. There have been few where the external causes of failure were clearer.