Ngl, I hated AMV’s back in the day. It felt like a mountain of low effort videos to the same songs, to the same shows, and to basically the same scenes.
Yes, true, there were the tsunami of quickly done AMVs that generated clicks, but there were some truly good ones out there. I'll mention one, not because of the art work that was done, but because it was beautifully smashed together:
Happy Material Medley. This is a rhythmical masterpiece of like 11 minutes, that combines all the versions of
Happy Material together, perfectly matched on the beat. Although, I personally think the visuals could have been better, there was only so much
Negima! that could have been used. So, I'm not taking too many points off for that.
But there are lots of others where the authors did a great job lip-syncing. I just wish that some of the older 80s music was used more, but that's my personal bias.
And to answer the question, I think people are just running low on free time. Everybody like has to work two and three jobs these days just to keep afloat financially. That's my opinion on why we're not seeing AMVs too much anymore. Heck, I barely have enough time to fit in watching anime as it is!