Assuming the covid-19 virus can last 72 hours on hard surfaces, what is the mechanism by which the virus becomes inactive? Does it just dry out?

As I understand it yes. COVID-19 is actually a pretty fragile thing

This is a picture of a coronavirus (Wikipedia), the pink, green and blue blobs represent proteins, these are used to latch onto cells and inject the viruses genes (the yellow coil) into a cell, where it takes over and manufactures more viruses.

The red shell is a tiny bubble made of ‘fat’, drying it out will damage the proteins which need to be wet to retain the correct shape and the bubble is not especially watertight.

Soap inactivates the virus by disolving the fatty bubble, 70% ethanol works by dehydrating via Osmosis (simply put, the water in a cell or virus tries to ‘dilute’ the alcohol solution surrounding it). 70% is about the sweet spot for disinfection higher than that and it evaporates too quickly lower and it is not drying enough.

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