Yes, the hobby is going through a period of change, but I'm a bit more optimistic about the future of kit building than many of the "doom and gloom" people out there. Yes, many of the old kitmakers are gone. Some will be sorely missed, others will be missed like a sore tooth. Those who survive or replace them are those who are taking advantage of new technologies. They're putting out some really exciting stuff.
Just look at a few of the kits put out by people like Page Aviation, Fun Aero or Mosquito Bite Planes ( to mention only a few). Laser cut parts that actually fit without sanding or trimming. Parts that fit together so that the model stays straight. Good quality wood, cowls that actually fit, and sometimes you actually get instructions you can understand!!!
As a believer in the cyclical nature of thiings, I can see a point where people will get tired of ARFS and start building so that their plane is different than all the other ones at the field. Plus, when you build a kit, you control the final quality.

papermache