I like email because it's one of the only "push" media that's both widely deployed and decentralized. (I once thought RSS would become that for the web, but it hasn't worked out that way.)
In any event, if you've been relying on Facebook to supply 75% of the traffic that goes in the top of the funnel, you're going to be having a bad day when that disappears. Even if the funnel is great.
As an RSS fan (and still an active user), I do agree that one of the prime failings here was that publishers in general too strongly backed the Facebook horse instead of, say, training users about the advantages of RSS. But yeah, why do the hard work today when you can wait for the rug to pulled out from under you by a third party and then do the hard work anyway?
That doesn't necessarily mean "email newsletter business", it could be any of the number of ways businesses have tried to convert first impressions into continued engagement. The referral platform shouldn't particularly matter, really. Today's complaints about Facebook-driven traffic drying up are last century's complaints about Yellow Pages-driven phone calls drying up. How are you handling people after they arrived/called? What other avenues for referrals have you explored? There's a lot of business advice that I don't think has largely changed there anywhere near as much as the technology medium has.