Insights into this issue are given in an exciting new book that I highly recommend, Early Christians in Disarray, edited by Noel B. Reynolds (Provo, Utah: BYU Press, 2005, 397 pages). In the introduction, "What Went Wrong for the Early Christians?", Noel Reynolds points out that a careful study of early Christianity pushes the date of what we call the Apostasy to much earlier than many Latter-day Saints have assumed. Much of the Apostasy has already occurred before 100 A.D. with rebellion and disobedience within the Church being a much greater factor than persecution from without. This timing helps us understand the loss of an emphasis on covenants. As Reynolds explains (pp. 5-6):
The scriptures of the restoration make it clear that ordinances such as baptism, priesthood ordination, and marriage are all based in covenants between man and God. Those receiving the ordinance have made certain covenants with God to turn away from their sins and obey his commandments, and God in turn makes promises to them. The ordinances provides a public witness of these covenants. What we had not previously realized is that when the second-century Christians redefined these ordinances as sacraments, they had already abandoned their covenantal understanding of the ordinances. These were significant efforts by some key thinkers in the Protestant Reformation to restore these covenantal understandings to the ordinances, but these all failed. Reinvented as sacraments, the ordinances were understood in traditional Christianity as the means by which God could bless a person with an infusion of divine grace, through the mediation of the priest. Once the covenantal understanding was lost, it made sense to bless everyone possible. So how could traditional Christianity deny baptism to infants if the recipient no longer was expected to be making a meaningful covenant in connection with that ordinance? A similar analysis applies to Christian sacraments such as last rites. This helps us understand what Nephi meant when he explained that "many covenants of the Lord they have taken away" (I Nephi 13:26).I find this helpful. The introduction of infant baptism was not the vanguard of apostasy, but a logical and even compassionate development of a theology that had already lost its covenantal underpinnings.
But why was the foundation of covenants in the Gospel so quickly eroded? In a later chapter, "The Decline of Covenant in Early Christian Thought," Noel Reynolds again provides valuable clues (pp. 305-6):
[George] Mendenhall agrees that "the early Christians did regard themselves as a community bound together by covenant" [George F. Mendenhall, "Covenant" in The Interpreter's Dictionary of the Bible (New York: Abingdon, 1972), 722]. However, he concludes that cultural forces worked to shift the Christian basis away from covenant after the first century. The term covenant itself was charged with political significance: "The covenant for Judaism mean the Mosaic law, and for the Roman Empire a covenant meant an illegal secret society" [ibid.]. As a result, "the old covenant patterns [soon became] not really useful as a means of communication, and may have been dangerous in view of the Roman prohibition of secret societies" [Mendenhall, 723]. The temple ceremonies were changed or abandoned [Reynolds cites Margaret Baker's Temple Theology: An Introduction (London: SPCK, 2004), 10].Reynolds goes on to point out a number of aspects of covenant theology and practice that survived, but clearly there has been a loss. The restoration of covenant relationships between man and God is one of many powerful aspects of the Restored Gospel for which I remain most grateful. There is great power and beauty in the LDS concept of personal covenant relationships with God, including the ways those relationships are expressed and strengthened through ordinances rooted in covenants, including (especially) the ordinances of the LDS Temple.
Daniel Elazar speculated further that in establishing orthodoxy and unity, the concept of covenant may have "presented a number of practical and theological problems" for Christians. The church, he said, "de-emphasized covenant especially after it believed that it had successfully superseded the Mosaic covenant and transferred the authority of the Davidic covenant to Jesus. After Augustine (354-430), the Church paid little attention to covenant and, even though the Eucharist remained central to Christian liturgy, it ceased to be a truly common meal and its covenantal dimension was overshadowed by other features and meanings attributed to the Last Supper" [Daniel Elazar, Covenant and Commonwealth: From Christian Separation Through Protestant Reformation (New Brunswick, NJ: Transaction, 1996), 2:32].
(I will add this post as an Appendix to my page, "Covenant Patterns in Ancient Jewish and Christian Religion - The Bible and The Book of Mormon.")