This is, I think, because it's easier to learn than ever, ham radio equipment is more capable for a cheaper (adjusted) price, and ham radio has grown tremendously worldwide due to all barriers being lowered a bit.
CW is very popular, especially given all the other options that are easier.
That it's a smaller percentage of hams that know CW than before is another way of saying ham radio has expanded well beyond CW and the population has grown. But if you have a finite resource (bandwidth) and it's in significantly more demand than ever before, it's a hard argument to suggest that it's not 'very' active.
i have attended club meetings and activities, hamfests local and around the US, participated in online forums etc for many years. morse code isn't a big topic anywhere outside of very specialized contexts, such as field day and qrp operation.
But the bands tell the opposite story, as crowded as they often are. I think the primary reason to use CW these days is because it's fun, it feels like you're really doing something and not just delegating the whole task to the computer, and CW is definitely far better than SSB for DX at low, possibly QRP, power.