I am 40 today (so quite a while since the original post on this thread) and have been building models since I was 7. My first kit was a Yak 1M from a Polish company Plastyk - a truly horrible kit that by today's standards looks more like random plastic that only occasionally touched the walls of a mould, but at the time was the best I could get my hands on. Those ancient kits are still sold under various labels, I think most recent was Mistercraft - avoid at all costs unless you too grew up in post Soviet Poland and have a nostalgic connection.
I think a big part of the hobby dying out is that parents don't even know this is an option. I was a teacher for 10 years, and during that time I ran an afterschool modelling class which was somewhat popular (less so in the more working class school, more so in a more affluent neighborhood school). I charged a fairly low fee which mostly paid for my time and some supplies, but I provided kits from my own excessively large collection that needed reducing anyway :). Kids came from various grades, I even had a girl from 1st grade once, though mostly it was 4-6th grade boys who like the hobby. Taking the precaution of only me handling the xacto knives ensured I was running around "cleaning up" the plastic parts that were cut off the sprues by scissors, but otherwise the children enjoyed the hobby and worked hard on their kits. The main question I got from parents was either "what is this?" showing a complete lack of knowledge of the hobby, or "is this like when I made kits in my youth?" to which I usually replied with "yes, though modern kits tend to be a bit more detailed"
That last statement might not have been entirely accurate, since my collection had everything from modern Dragon kits, to older Tamiya, Italeri, or Hasegawa kits that have tooling from the 1980s or even earlier. (I do have a few older Matchbox kits, but I could not part with those for the class).
Since I was a kid mostly in the 90's, I saw the incredible change in the videogame industry that kept many other young people away from the hobby. For me it was always a very simple choice: I always preferred something I could touch, and no matter how good the graphics, sound, or vibration of a controller got, nothing could substitute for actually holding a model soldier, airplane, tank, or ship in my hands. In fact, I often found myself sitting at a table building a kit (I especially remember doing this with a SdKfz 234 from Italeri in 1:35 scale) while my cousing was playing a computer game in the same room at the same time.
I would say that they only thing stopping me from building kits these days is the busy nature of my life (I am a father, have a full time job, take turns cooking with my wife, and as a home owner I also tend to fix things around the house). However I also have a toolbox full of kit building suppies ready, so that I can do little build sessions at any time (naturally more complex operations such as airbrushing are done in my spraybooth in the basement).
As for the future generations, I certainly hope the young minds I exposed to the hobby will remember and seek out more models on their own. A friend of the family has a son who is definitely interested in military history and I recently bought two italeri sets (1:72 infantry, one US one German) for him - at least one of those was an old ESCI reissue and I have very fond memories of collecting ESCI soldiers (heck, I still have them all in the basement!). He immediately built a diorama for them as well and was overjoyed with the detail on the tiny soldiers. It seems that advertising may be needed since, as I said at the outset, in most cases parents don't even know this hobby is an option.