There are still wargaming companies around, of course, though all the "big" companies I knew in the 70s and 80s are dead and gone. Even Avalon Hill, the first of the big wargaming companies, eventually went under and was bought by Hasbro, which keeps a handful of titles active - none of them the historical games that the brand was once famous for. Steve Jackson Games, best known back in the day for its $2.95 microgames, is still in business, but most of their time and energy seems to be spent on the massive GURPS RPG and humorous card games such as Munchkin and SPANC.
For that matter, you can still find gamers around...certainly the prices games command on eBay says there's demand for games. So why hasn't the hobby rebounded, especially since the Internet makes it so much easier to get hold of other players? Maybe it has, and I'm just far enough out of the loop so that I don't know what's happening. Another thing to put on the to-do list...but for now, I'm going to settle for taking redmartel up on his offer to roll the bones and push the counters around a bit.
A lot of the energy in the hobby that used to go into wargames has gotten drained off into the other parts of gaming that Costikyan talks about, but there are still people out there playing Magic and Exalted and HALO and Civilization who would probably enjoy sitting down and thrashing their way through a good historical or SF boardgame that could be played in a couple of hours, but the folks who make that kind of game don't have the resources or the marketing savvy to get their games out there in front of people who might be interested in playing a 21st century remake of Oil War, or a slimmed-down Gulf Strike that didn't take a week to play after spending another week reading the rules and sorting out the counters.
There's a continuum in games, and back in the day when SPI was cranking out six magazine games a year and at least as many boxed games there was a lot of ink spilled about the distinction between games and simulations, with (as I recall) the Civil War gamers being some of the most snotty when it came to "accuracy" of games such as Terrible Swift Sword and the other Civil War games it spawned. On the one hand, "games" had fairly simple rules, not too many units, and could usually be played after a quick perusal of the rules. Thus the nickname "beer and pretzel" games. On the other hand, "historical simulations" like SPI's memorable Campaign for North Africa might well have thousands of counters and markers, complex rules covering seemingly every possible eventuality, and obsessive attention to detail. I particularly recall one playtester of the game, J Matisse Enzer, being cited for locating POW camps in intermittent streams so as to be spared the logistical burden of feeding and watering them...which no other wargame before or since even had the mechanics to allow, and that pretty much says it all, doesn't it?
Somewhere in the middle were "monstergames" such as the aforementioned Terrible Swift Sword, a game on the battle of Gettysburg where all units were individual cavalry/infantry regiments or artillery batteries, with a scattering of leaders and supply wagons. Monstergames were usually sizable - at least two maps and several hundred unit counters plus markers - but the rules usually weren't too complicated. There were exceptions to this general rule, but even the enormous Europa series games from GDW (starting with Drang Nach Osten, later renamed Fire In The East) had fairly simple mechanics; much of the Europa games' complexities involved the ever-evolving air combat and replacement system, the armor effects rules, or special rules covering unique situations peculiar to a specific campaign/game. The monstergames were rather popular and very profitable, but the amount of design and development required kept their numbers down. I've owned a fair number of them myself, but for obvious reasons haven't played any in years.
It strikes me that a lot of people who take a "gearhead" attitude toward RPGs, the kind who see an evening of role-playing as somewhat of a waste if no fighting breaks out, would be the kind of people who would also be interested in wargames. The same goes for people who play the various mutations of Command and Conquer or The Operational Art of War. The big question is, how do you get those people interested in boardgames? How do you attract people who are sort of interested in miniatures gaming but don't have the talent, time or money to paint a regiment's worth of miniature soldiers? What we need around here are some boardgaming evangelists from the ranks of grognards...the alternative is to breed opponents, and that just takes too damn long. ^^