I have to agree with tedster, but at the same time, I always tend to "point the finger" at myself if a site doesn't rank well enough, cause it's my job to "deal with the flaws Google has" and that means understanding what it takes to rank today, so if I'm not "getting it done" I refuse to "blame Google" and "point the finger" at myself which forces me to go looking for answers. *
It might seem like "blaming Google" is "the right thing to do" in some situations, but there are still 10 sites/pages that rank on page one, and the only way I've found to rank consistently or recover lost rankings is to "point the finger at myself", cause when I do I have to go hunting for "what I'm missing" that's keeping whatever site(s) I working on from ranking.
I guess the bottom line for me is: If the site(s) I'm working on doesn't rank well enough, then I need to do a better job of understanding what Google is looking for right now and that approach keeps me on my toes and definitely helps keep the site(s) I work on in the rankings, cause it forces me to figure things out instead of "hoping Google finally gets it right" and ranks a site I'm supposed to be making rank based on the algo and where it is right now.
* Sometimes when I start working on a site it's "on the way to ranking" and I have to wait on Google to get the changes through the system, but when I've been working on it consistently for 6 or more months and it's not ranking like it should, then it's not Google's fault and there's something I could/should do about it.
As the karting instructor used to say to us, lads the Blue flag means,
"You are doing very well indeed, however, the kart behind you is doing just a little bit better, so pull over an let him past "
You could accept what I call the continuing fantasy that Panda is an Algo,
That some chap, in a small town full of well paid grads, in a country where a small town full of Well paid grads is possible/affordable , assigned your site a editorial score that changed your sites traffic band, "blue flag" moment, bye, bye your traffic
At least here in the UK, in the SERPs I measure, Google has increasingly, over the last few months, featured new sites backed with thousands of Xrumer or injected links in high positions. These have been increasing in number after each update. So, to answer your question, Google is at fault for a lot of extremely poor results lately, but hopefully not for ever - I wouldn't have thought that filtering this junk would be rocket science.
If a site loses traffic for the first time at a Panda update it's possibly due to a change in Panda which now affects you. If it happens at a Panda refresh then it's a signal, as Panthro says, your competition has raised its' game and your site is no longer viewed as high quality relative to everyone else.
If your traffic had been going up significantly prior to the Panda slap (overall or for one particular part of the site) it could be that a quality issue has been exposed and the whole site is now demoted.
Plus there may be absolutely nothing wrong with the site whatsoever but, unfortunately, the algo/Panda/Penguin erroneously considers the site a target and whoosh, it's toast.
For example I have a site which for one keyword the Panda demoted it to oblivion in Google.com, it is the US spelling of the keyword. In every other Google SERP I am #1 or 2 for this word and for the UK spelling of it I am at #1 or 2 even in Google.com.
Remind your client that Google is not a benevolent entity, they are a Wall St listed company who must earn increasing amounts of profit for their shareholders and that, increasingly, they are needing to send traffic with buy intent to locations other than the small websites it has been for years which may or may not impact your client's site.
Perhaps your site was deemed redundant in Google search results because Google now shows essentially what you did in their own sidebar? Only Google knows for sure.
The bottom line is that there is no fault in your situation, only change. Google is not just a search engine anymore.