From a UK perspective..

While I wouldn't say the hobby is dying, interest in it does seem to be waning. I think the government and bureaucracy have something to answer for with respect to flying. Tightening the rules on flying in the name of safety has put people off the hobby, in my opinion. In the UK we're supposed to take a test and having third party insurance is advisable. The test isn't difficult by any stretch and insurance isn't expensive. But I think those, combined with relatively strict rules in the name of safety, are enough to put people off bothering. Now don't get me wrong. I think safety is paramount and I understand to a degree why the rules are the way they are. My understanding being that people have done dangerous things and as such, the government has responded (by being overzealous with the law, in my opinion). The end result is that less people are bothered to enjoy the hobby.