The situation with Dortmund is very peculiar, but there's been some different theories on why they are doing so badly.
Some journalists have suggested that the high line & heavy pressing tactics are starting to wear on the players making them more fatigued in the latter stages of games.
Others have said that teams in the Bundesliga have started to sit back against them and soak up the pressure, then hit them on the counter. So it could possibly be down to their predictable, one-dimensional style of play.
Additionally, others have also said that the players are disheartened with the fact that Bayern keep taking all the best talent away from everyone and forming a monopoly in the Bundesliga. It must be disheartening seeing players poached from your rivals year after year, ensuring the gulf in quality between Bayern and the rest expands. So the players have lost motivation in the Bundesliga. This could actually hold some weight, considering how well they've done in the Champions League so far despite being bottom of the league.
Personally, I think it's a combination of all these factors. The players are clearly underperforming because they have some outstanding players in their side.
Regardless of the reasons, they are in deep trouble and they need to sort it out soon otherwise their prized assets will be taken away from them and they will have to completely rebuild their team from scratch.