Board games have exploded in recent years, but like abstract strategy games, wargames are no longer the center of the boardgaming world. I think board games have expanded so much because designers and publishers have introduced new games and gaming styles that expanded the market. There are still the same thousands of people playing chess or Gipf, and the same thousands playing hex-and-counter wargames, but there are also thousands of people playing CCGs and thousands playing eurogames and thousands playing cooperative games. There are some really cosmopolitan board gamers, but there is a large group of people who would like to play Pandemic but abhor the direct confrontation of hex-and-counter wargames and abstract strategy. Some of the most successful games are those that appeal to multiple groups, like Twilight Struggle or Legendary.
Of course, that's a re-definition of terms as well: back when Charles Roberts started Avalon Hill or Gary Gygax &c. started TSR, there wasn't really a "boardgaming world"—boardgaming was just getting itself organized; there were wargamers and miniature games, but the eurogame was just a gleam in Sid Sackson's eye.
This article's postmortem is almost comical in hindsight, but it looks like the core of the analysis is from 1998, when boardgaming was in a very different place.
I love Sakigahara, the COINs and most of the Mark Herman games, but I'm not moving any farther in that direction.
Wargames got so baroque, I find it hard to believe very many people playing the 60+ hour campaign of Terrible Swift Sword. Although probably thousands of people have played Pandemic: Legacy, which itself will look strange in 30 years.
There's a kind of inverse hype cycle whenever a newer, better version of something comes out. In the late '90s no-one dared make a 2D videogame, because 3D was the future. Then we saw which things 3D did well and which it didn't, and have a new appreciation for what 2D games can do, and we've seen a resurgence in recent years.
Someone with more experience on the business side can explain it better than me, I'm sure, but the shift from catalog sales to pre-orders saved the industry. Instead of printing up 10,000 copies of Spices of the World and hoping they sell out, now the publishers have cash money in hand and know that they'll (probably) make a profit once the printing presses start up.