This is a tough and very valid question, and though these areas are far from my range of familiarity, I cannot help being compelled to wonder the same thing. Why was blade production in the British Isles so limited, if not entirely absent ?
I never understood why the Scots never made their own blades (no matter what was shown in "The Highlander") and it seems only 'sword slippers' or cutlers were using blades from elsewhere (typically Germany) to assemble the swords they produced.
I am not sure if the Norman conquest of 1066 was a defining moment for the 'end' of blade making in Britain as change is typically subtle rather than dramatic or instantaneous. The question I have is, was blade making there really that prevalent?
Oakeshott (1964, "Sword in the Age of Chivalry", p.12) notes,
"...it should be noted however that nearly all examples of Celtic swords found in the British Isles tend to be smaller and of poor quality, but the Continental ones are splendidly made". This was referring to 'Group I, 1050-1350, so perhaps this notes the 'decline' being discussed.
I am unclear on the terminology in blade making but it seems that billet welding and 'pattern welding' are basically the same. From what I can understand this consists of welding together separate forms of metal stock and forging them together (my entirely lay observation). This was the character of the blades of the Viking period. The medieval swords of the 'Romanesque' period or 'great swords' had developed from these Viking swords of 9th c. + and the 'Norman' swords, if I understand correctly were considered 'transitional'.
From here the primary influences, if not sources, for swords were of the Carolingians and Franks.
In "Swords of the Viking Age" (Pierce, 2002), Oakeshott notes (p.3)
"..we can be fairly sure that blades, the best blades that is, were made in the Rhineland, where the town of Solingen later grew, and in the region of the old Roman Noricum (S. Bavaria) where the Celts of the earlier iron age as well as the Romans obtained their swords, because in these two locations was found the finest iron".
It would seem that the hardest thing about identifying sword blades of these early periods, before they were marked by makers of course, is that they were really so similar in convention. As Lee Jones profoundly noted in the Viking Age book, the primary means of sword identification rests on the hilt, as here is the area of most distinctive variation which can be aligned with local or period character.
While we know the location where a sword is found deposited, we cannot be certain of the origin of the blade, or naturally the entire sword might be from somewhere else (as lost in a raid or battle).
H.R. Ellis-Davidson noted in "The Sword in Anglo Saxon England" 1962,p.34)
that "...pattern welded swords may not have been made in many workshops, and as yet there is no evidence they were produced in England or Scandinavia, though there seems no convincing evidence why they should not have been".
I guess my take on this would be that the prevalence of blade production was mostly Continental, primarily in the German locations, with some degree of presence of smiths in outlying areas. Changes in forging methods were likely dominated on the Continent as pattern welding diminished as well as new means of smelting and forging steel became more advanced.
While an admittedly elementary view with my limited understanding of metallurgy, blade construction and these ancient times, I simply wanted to add what I could to a most interesting question.
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