My best guesses would be the world recovering from some kind of major disaster that actively damaged something so that the other races were wiped out and magic suppressed and forgotten, or someone willfully working to eradicate such - or possibly the former caused by the latter. There was a race wiped out down to two surviving members on my world - they were a little isolated, but not long afterwards even in the area they'd lived in they'd fallen into being practically legends and nothing more; give enough time and enough other pressures to distract people and they would've been completely forgotten save some out of the way rubble in a few generations, taking an entire school of magic with them. [] This "Cycle of Conflict" is something that hasn't happened for me yet, so I wouldn't know if anyone in it was from Saint Ivalice, and from what Zidane had said, many of those involved gradually lost memories of their homeworld, which might make it difficult to ask the others.

[] I don't suppose your Dream Ivalice had moogles?