I started scrapbooking in 1999 before there was much of anything in stores besides Mrs. Grossman's stickers. I watched it peak in the early 2000's, then noticed a big drop after the housing collapse. I think people just had less fun money to play with. I think you're right about digital scrapping having a big impact, but I also think digital cutters have had a huge impact on the hobby. No need to buy embellishments when you have a digital cutter and a variety of cardstock. It's a shame. While I love my cutter, I really miss browsing in scrapbook shops.
On the up side, I have enough supplies to scrap for years to come without buying anything else.

But dang, I would sure love some new Disney albums.