The ‘Edit in Excel/Word’ item is missing from document drop-downs.
There are many possible causes, but one that is often overlooked is simply leaving this permission out of your custom role. Do a quick test – temporarily give a user with this issue ‘Full Control’ rights and see if the Office link comes back. If it does, we have your solution.
Go to the root site and edit permissions. Click ‘Permission Levels’ and edit the custom role that is causing trouble.
Check ‘Use Client Integration Features’
That should clear it up assuming everything else is configured properly.