Tell him what you think from the heart, from your feelings. It doesn't need to be ruthless, but in a caring and concerned way. You are a human being and he is a human being, and sensei is not god or the all knowing father, therefore you must tell him, if you care about the kids class.
The man has feelings, but he is not going to die of stroke if you tell him the truth. He is clearly trying to cover up the fact that his technique has become poor, and surely he knows this! Deep inside he knows, and he is scared that somone someday will point this out.
Yes it might not be a pleasant conversation for him, but he knows and therefore you will not tell him something he doesn't already know in his heart. Hiding these things can be extremely harmful for the person hiding the feelings, and you might be doing him a great favour by showing him a way out of his self made illusion. People need to learn all their life, and you need to remind him of this.
Speaking the truth always dissolves the lies and illusions, and he must face the truth sooner or later. For the kids sake I hope it will be sooner.
Is all that is true
Is walking the way of truth, and therefore also showing others the same way