I was an ardent supporter of this theory a while back. But since then I have been forced to revise my opinion.
Astro turf was introduced in the 1970s. But Pakistani hockey team enjoyed a glorious run from 1978 to mid 90s, all of which were played on artificial surface. Pakistan won 3 WCs, 1 Olympic Gold and 3 Champions Trophy playing on this surface which was as foreign to them as it was for us. Now Pakistan wasn't economically much better than us, they were indeed better but not by much and they had a paucity of astro turfs just like us. Then how is it that they were able to compete with the Western teams but not us? Their decline in late 90s had nothing to do with the playing surface but the decadence of their hockey administration and failure to adapt to modern times. The Dutch took a giant leap forward in the 90s in terms of fitness, tactics, strategy, skills, philosophy etc and Pakistan missed the bus. We missed our bus 10-15 years earlier !!!!
I think this astro turf excuse is a lazy proposition put forth by some of our former players and officials to justify our plunge in status. Rather than acknowledging the increasing competition, our outdated game style, corruption/nepotism in the organization, disdain for fitness/skill improvement etc, this astro turf excuse was a convenient cop out mechanism. Assuming we couldn't compete with Netherlands or Australia (because their kids get exposed to synthetic turfs at a young age), what explains our pathetic record against Pakistan in those 20 odd years? If Pakistanis could adapt, what was stopping us? I actually think introduction of astro turf was the best thing that happened to hockey and many Indian legends including Balbir Singh (Senior) say the same. However that is a topic for another day.
We may compete or not compete with Western nations but astro turf can't be a reason. We have a tremendous human resources advantage over them because of our population. We have an expanding middle class larger than US population, growing awareness of sports, more money, more incentives/rewards (Sindhu vs Marin comparison in terms of brand value), everything better than ever before. Most importantly we can have our best athletes in hockey, Europeans/Australians generally lose their most gifted athletes to football, rugby, tennis, athletics, swimming, boxing etc which are way more lucrative. If we are unable to compete with the reduced/mediocre competition of the Western teams we have other reasons to blame.