I've been active in almost all sides of lfs, from demo to league racing (except cruise and Drift), and I can see many reasons why we got to this point, and most are not related to development!
Demo should have been restricted in some way, a simple 3 months time limited demo account would probably have incited more ppls to buy licenses as most racers only care about their stats....instead we have the biggest chunk of the racers camping on demo servers for years.
In S1/S2 public racing I think that multiclass racing has had a very negative effect on the general servers activities, it is very opportunistic to offer something for everyone as ppls will always join the most busy server, in the end it kills all the servers which are more specialized...there used to be many popular (single class) servers and drivers sprayed themselves over them, then when CTRA started everybody went there, and that trend has been repeating since... I mean nothing bad for the guys who manage those multiclass servers, they have done the best thing they could do to get a popular server and succeeded, so respect for that!...buy many got bored of the racing and managing unpopulated single class servers, they left or looked for something else!
In league racing we have tolerated too many bad behaviour and the drivers who should have shown the good example didn't and many ended up believing it was the right way to get to the top, what we see now is the result of that mentality, they quit as soon as they see no chance to be in top 3 and respect now one on the track. It resulted in a very bad ambiance for all the drivers who participate in leagues, the amount of protests increase considerably and we got many fights and arguments...then many just started to look for other sims and a better racing mentality/ambiance... But like I said, we are all responsible for that, organizers and drivers!...Also we need new drivers to join leagues racing consistently and for that we should organize more amateur/beginner leagues and series, I believe that leagues like NDR's GTAL were very important for the league scene in general (@deko: hint!!
).
On the PR side, the lfs forum has been very negative in recent years, mainly due to the ppls who don't race and spend their time trolling and flaming others, this is keeping the important ppls away (the ones who race and have something positive to share). What we read in topics today is not representative of what the active community thinks, but they don't share it because they are just afraid to be bullied by the forum masters (or losers)... Maybe a stronger moderating system would help, but something more radical could be done too, something like needing a certain amount of kms per month to be allowed to post in most forum sections (of course I realize the need for some sections to remain open for new comers who need help).
Anyway I don't think we should point the finger at anyone, we are all responsible in some way and the way things are now, only a collective effort will allow our community to survive, by that I mean Teams, Drivers, Organizers, moderators and Developers!
My 2 cents...