I think it's possible to avoid this (or at least delay it) but it takes significant work. I try to keep learning new things to slow it down (I'm in my 40s).
I think it's more than reality no longer matching your mental model. Too many years of disregarding input stunt your imagination. And it isn't just age that does this -- depression can have a similar, but even more powerful, effect.
I know many older folks (> 60) who are still vibrant and have curiosity about life. Unfortunately I do tend to agree that a certain rigidity of mind sets in at some point, and it becomes somewhat more difficult to rearrange your neurons to adapt to new ideas. It doesn't mean you cannot accomplish things, but just as it is sometimes important to realize you lack experience when young, it seems important to recognize the changes in your mind as you grow older, and accept them with a degree of grace and a willingness to acknowledge the differences.
This is one of the biggest reasons I'm afraid of growing old, but I'm sure there are plenty of old people for whom this doesn't happen. My dad (he's 65) seems to do a pretty good job. He's an electrical engineer who's still very attentive to current events and playing with computers, unlike my mom (64), who I'm not sure has figured out how to send an attachment yet.
I think it's more than reality no longer matching your mental model. Too many years of disregarding input stunt your imagination. And it isn't just age that does this -- depression can have a similar, but even more powerful, effect.