'Dying' is not quite right. The word is 'evolving'.
By far the simplest way to explain this is....were you to look at who the first few hundred 'Users' were here...[in order of UserID numbers....1 to 200, say] possibly half would be or have been skinners.
Now we have 2.6 Million reg'd users, but there certainly are NOT 1.3 million skinners [here OR anywhere else, for that matter].
So....the Wincustomize.com community has grown massively as skin-use popularity expands, but percentage-wise there are fewer skinners.
Skinning itself has changed....it's [generally] more intricate/complex but REAL diversity [through independent alternative skinnables] has dwindled.
That last bit is the saddest, eg for all intents and purposes there are just 2 [skinnable] media players left...WMP and WA, yet 5-6-7 years ago there were quite a few, equally as popular [or close]...kJofol, QCD, Sonique, etc.
Skinners back then might not 'just' be WB skinners....but also dabble in Sonique, or ICQ Plus, etc.....and the diversity probably enhanced creativity/experimentation.
But now.....'dying'?, no, just changing....