I think it has a lot to do with recorded music itself not being a social experience like it used to be.
I used to buy and listen to a lot of music because listening to music was a social event where friends would gather, hang-out, and listen to music together.
I very rarely have experiences like that anymore.
Things like going over to someone's house because they had a great stereo.
I am sure those who loved knitting bees or some other past social outlet experienced much of the same thing only there wasn't a YIAA (Yarn Industry Artists Association) suing them for copying knitting patterns.
I now spend most of my at home time reading and communicating with friends online, and when my friends do come over craving some electronic entertainment, we play video games and watch movies.
Music just never enters into the social event unless it is the social event (live music) or something like going out to a bar, dancing, or to a party and then the music is already ubiquitously provided instead of being personally collected.
Maybe the alternatives are just better and people are consuming what brings them the experiences they want, which unfortunately for the recording industry, happens to not be their products.