I think a big factor in the decline in traditional home theater systems is a replay of decades past, i.e. cassettes vs. LPs, VHS vs. Beta, and streaming vs. CDs and Blu-Rays: To wit, to a significant portion of the population, convenience trumps quality. For them (as with cassettes and VHS), streaming quality and soundbars are “good enough.”
Plus, I think a HUGE factor is that setting up a HT system now is insanely complicated, what with the proliferation of 100+ page manuals. Soundbars sound decent, and are pretty easy to get working.
Plus, hardware manufacturers seem to make things less-and-less user friendly with new generations, at least Yamaha the brand I’ve been using for AVRs for most of the past 30 years. For example, I used to be able to see an icon on the AVR display that would tell me if a disc or streaming program was getting me 5.1. How, I have to punch a button on the remote to see that info. And don’t get me started on the older vs. newer remotes.
Regards,
Wayne A. Pflughaupt