I think a lot of the decline of precision shooting has to do with the general change in attitude towards shooting in itself. Once considered a very demanding and disciplined sport, shooting is now looked upon as a survival skill.
I think its safe to say that the vast majority of gun owners today have guns for the purpose of self defense. Shooting sports take a very distant second or maybe third place.
Not to mention that for many, life is very busy these days.
So why should they spend the time, money and work so hard to hit that tiny X when all they really need is to be able to keep shots in the A zone?