However, I think there's another factor at play here - "art music" experienced the same academization and post-modernization that we saw in the visual arts. Serialism, musicque concrete, aleatory composition - all these things pushed the boundaries of what "music" actually meant, going against popular sensibilities in ways that (and I could be wrong here) the "art music" of previous centuries did not

It's true that in the 20th century, art music became advanced beyond the point of being immediately accessible to most non-specialists. No one would deny this. But so what? Something similar happened in science as well: in previous centuries, any educated person could hope to understand the greatest work of the time, and even possibly contribute to it. Now, that's no longer the case.

This sort of progression is arguably inevitable. If people spend all their time refining some intellectual discipline, eventually, the results are going to require something like specialist training to properly apprehend. (That's not to say that casual listeners couldn't get a lot more out of advanced art music than they actually do, with suitable popularization efforts.)

The idea of linear stylistic progression totally breaks down once you get to the mid 20th century,

I dispute this entirely, and attribute this impression to our historical proximity. If you lived in the 18th century and were a connoisseur of music, Mozart and Haydn would have sounded a lot more different from each other than they do to us today -- because we can contrast with what came after. In a century or two, the progression of twentieth-century music won't seem very different in kind from what happened in earlier centuries.

Again, that's not to say that something different didn't happen in the twentieth century -- but every period has its unique developments.