I don't think it's dying as such, but the recession and other economic contributing factors have definitely had an effect.
The main one being, motoring is the most expensive it's ever been in the short ten years I've been driving.
I know more people than not, some of them good friends, that have traded in their hot hatch or 200hp+ petrols for the equivalent TDI's and taken a step back from the scene purely because they don't feel their single daily vehicle necessarily has a place on the car scene, like their Civic Type-R/Golf GTI/Audi S3 etc... had or still has today (me being one of them!).
Maybe for a lot of people too as we get older and have property/kids and so on, it's inevitable that you move on from the 'scene' but the VW shows I go to are still well attended and supported, just like when I first started going really.
It's probably the same cycle, just seen from different angles.