Subject to opinion, but a lot of people feel like the quality (in terms of story) of content has gone down so they lose interest.
Ticket prices have skyrocketed and who really likes paying "movie prices" for things like soda and popcorn after getting reamed on the admission cost?
It's much more convenient to purchase VOD titles and watch on your own schedule.
Home theater displays and audio gear has become significantly cheaper so it's possible to get a very good viewing experience at home.
I think piracy has little to do with it. The people who are going to steal, are going to do it anyway. I doubt the population of those people is growing significantly. It's the number of non-pirates that's not bothering to consume movies in the cinema that's the "problem."
In short: The industry is actively chasing away consumers and technology is making it "worse" by creating an environment where people can get similar experiences on their own schedule at home using VOD. Do I want to deal with the hassle of going to the cinema or do I want to wait a little while and then watch on a large high def display in the comfort of my own home.