I don't think they're losing popularity it's just the fact that so many things have already been done that it is hard to come up with new ideas. Take the Sonic ROM hacking community for example, when I first started to follow it there were things people deemed simply impossible to do. As the years rolled those things became possible and tools were released to make hacking the game much easier.
By that point people were releasing very good ROM hacks almost every month or so. People were one-upping each other constantly in a friendly competition to see who could make the best hack. Eventually they either grew bored with it or going any further would be so complex that you might as well make your own game from scratch. All the while they were teaching the community how to do the things they were doing.
Now a days it's hard to just start a project with the intention or doing something people haven't seen before. There are still lots of guys out there that enjoy doing this stuff and they're still releasing great hacks and tools for other people to use. Maybe the ROM hacking forums are less active but I don't think the guys that have been doing it for some time are any less active than usual.