Could be several things.
The tank may be half full of calcium/lime/rust/grunge, reducing the capacity of the tank. Do you ever drain some of the water out through the spigot at the bottom? Twice a year open the spigot and let the water run out till it runs clear.
The elements may be crusted up or broken. You can replace the elements, but it is a pain in the butt.
In a gas water heater, there is a tube on the cold water side that directs the cold to the bottom and forces the hot water up. Not sure if this is true for an electric water heater.
It is possible that the plastic tube is in the wrong side, or was not in the heater to begin with. Least likely of the three guesses, but I have seen it happen. If the tube was taken out, the cold water will dump into the top, mix with the hot, and you will soon run out of hot water, although there will be plenty of hot left in the tank.