I don't know if it's dying out or not, but I'm certain that time is a factor. It's not the only factor, however. I have arthritis in both hands, elbows, shoulders, neck, knees, and feet. If I had to hand quilt, I wouldn't be able to quilt at all. I'm thankful to have a sewing machine and a couple of very talented long arm quilters so that I can enjoy the machine piecing and machine quilting that I am still able to do. (And who knows how long that will last?)
There was a time when women wove their own fabric and spun their own thread. I know some women who still do weaving, but I don't know anyone who still spins their own thread. As with any craft that was once done out of necessity, mechanization has made it easier. Because it's easier, more people can enjoy it. No longer a necessity, it is now an art form.
Personally, I don't care whether quilts are hand done or machine done. I love them all the same, and I don't check the label to see how they were put together. I just admire the handiwork and I'm grateful I can participate to the extent that I do.