I think there are two big reasons for the decline, neither of which we can do much about (and arguably neither is even something we should try and do something about).
The big one is video games - it's cheaper to buy a flight simulator than it is to buy an RC airplane, and you can crash as many times as you want for no penalty and it's less of a time commitment to go and play a game for a bit on your computer than it is to get everything together, go to a park, fly, come home, unpack everything, and do whatever maintenance needs doing. Basically, something came along that is better in most respects for your casual hobbyist. You have to be a bit crazy to want to fly RC planes.
The other is FAA regulations. It's substantially harder to go and fly legally than it used to be and many towns ban them in most places. In this the hobby is a victim of its own success - drones got so popular that people decided to regulate them. And we do need some form of regulation even if the current regulations are ineffectual and essentially punish law abiding people without really impeding bad actors - otherwise it's only a matter of time until there really is a disaster where someone does something really bad with a drone - they're just too capable, easy to fly and easy to buy these days to expect otherwise.