You're right about the escalation in costs, the move upmarket, and consolidation of the properties in the strip, though there are also new players that have been entering the market, such as Resorts World (owned by Genting Group) and Virgin Hotels. Reduced competition is probably a factor, but the properties closely monitor every metric possible, and since many of the major players have simultaneously operated properties across a broad spectrum of price points, I'm sure their gradual move upmarket was carefully considered as the most profitable choice. Of course, most profitable for the casino/resort is in near opposition to 'good value' to the people who visit those properties.
Other pressure has simply been the change in the way 'guests' prefer to spend their time in Vegas. Gambling revenues per person are way down, but those same guests have dramatically increased their spending on things like drinks and bottle service at clubs, private cabanas at pools, fine dining, shopping for luxury goods, going to shows, etc. So, the entire strip has chased those shifting preferences, installing high-end clubs anchored by renowned DJs in seemingly every major resort. "Downtown" Vegas (Fremont St. area) is definitely the more 'budget-friendly' part of Vegas, but most those properties have been rapidly moving up to appeal to more luxurious tastes as well. Slot machines have dropped in favor precipitously and have been replaced by more social table games that better fit with the 'party' atmosphere that Vegas is currently chasing.
If you were the type of person that wasn't particularly interested in gambling, the 'old' Vegas was easy to exploit -- properties wanted to attract gamblers with loss leaders like 99 cent shrimp cocktails, $19-dollar room rates, $5 all-you-can-eat buffets as an incentive to keep the chain-smoking hordes anchored at the slot machines for days at a time. Those deals are all but gone from Vegas, even for off-strip 'locals' properties. I kinda miss being able to get all-you-can-eat pancakes for $2 at midnight, but on the other hand, there's a lot more fantastic food and cool experiences on offer. As somebody that isn't particularly attached to a single way of doing things, it is fun to observe the way that Vegas continually reinvents itself over time.