Kit building has never died or slowed down. The thing you are seeing is a huge influx of ARFs from the "I want it now" generation. As they get bored and move on to the next thing that dominates their finances, the same old kit building guys are still building kits. Some of the guys that have been around forever have a few ARF planes, but mostly they stick with kits because they enjoy building them. Many of the new guys in the hobby buy ARFs because they want to fly and not build. They seem to stick with it a while and quit. The ones that stick with it longer, seem to eventually build one or two, or keep flying ARFs. Doesn't really matter which they choose, as long as they stick with it.

Just my opinion, but I don't think the number of builders have changed much, nor will it in the future. You will see a lot of new ARF guys come and go though.