I suspect it's declined pretty significantly--in fact, because people wear fewer shoes that can be repaired and wear less tailored clothing. But of course there are still tailors and cobblers (who are often a good place to get backpacks and the like repaired) are still around. Many laundry places will do minor repairs as well.

In the anecdata department, the last time I took something into REI to be repaired they told me they didn't do that any longer and to send it to Rainy Pass in Seattle.