By "reality" I don't mean that government is necessarily an unalloyed evil (though a strong argument could be made to that effect). But government's very nature is one that deserves skepticism and mistrust. After all, as an institution with a "monopoly on violence," there's no reason to involve government in any aspect of human life unless you're trying to make people do things they don't want to do -- with dire consequences for noncompliance. However necessary that may be, the role of designated arm-twister is one that should come heavily laden with distrust.
That's especially true when you consider the actual track record of government, whether federal, state or local. From the use of eminent domain to increase tax revenues to surveillance of politically active organizations to violent raids and road-side stops to enforce prohibitions on disfavored intoxicants (and legally mug motorists), government is an intrusive agency at best and an abusive one at worst. Government officials are perfectly capable of violating rights and also punishing critics.
So it's no surprise that trust in government has declined over the years, from a high back in the neolithic era ... errr ... Eisenhower-through-Johnson days to today's rock-bottom low. What is surprising is that trust was ever high. To be honest, government hasn't necessarily changed and become more contemptible since the gray-flannel era -- we may have the wars in Iraq and Afghanistan and the Patriot Act now, but back then the powers-that-be unleashed the IRS on enemies of the administration of the moment, deposed foreign leaders and sent boys to die in Vietnam.
It's worth noting that Americans expressed their greatest trust in government at a time when media was at its most concentrated and controlled -- dwindling newspapers, a few heavily regulated broadcast networks, a muzzling Fairness Doctrine and no Internet. These days, a handful of politician-friendly editors won't keep government misdeeds from being reported and critiqued far and wide, since even the smallest publications have wide reach online. The result is the graph above, showing a fairly steady decline in trust over the years, offset only by the brief post-9/11 panic.