I took part last season of MoE, and i also noticed a certain decline of this league. In my opinion not only because of a decreasing starting field, but also because of a kind of lazy administration. Results came only three or four weeks later, the final result (... do we have one atm?) took at least months. The webiste fell asleep right after the first race without a single race-report on it.
Dunno what came first in this chicken/egg-question, but i'm sure some problems of this league a homemade. The MoE is surely one of the best leagues in LFS and it made a lot of fun to be a part of it, but if a game has no noticeable progress anymore and people are getting bored of the game, it's not enough to create a new class of cars and hope it's getting better. You have to motivate the people not to miss these great events. And that's imo the job of an administration.