I think the facts that most model railroaders have 2 lifetime supplies of kits and that they ruin many of those kits when they try to build them are mostly responsible for the demise of kits. Better to buy one built up model and enjoy it on the shelf than have 3 more in boxes in the closet.
Now if we had some new blood coming into the hobby they'd be building up collections of boxes in the closet but that's not the case.
It must be tough on new guys to pay big bucks for everything.
Atleast they're potential customers for kits in the closet.