What if we're comparing the costs and activity to an unrealistic standard?
In other words -- how do we know what the pilot population should be, in an open market with no artificial props (such as the GI Bill was for an entire generation)?
We're concerned that the population is declining -- but was it artificially high to begin with?
In some ways you are correct. WWII, Korea, and Vietnam produced a lot of pilots. With those types of wars largely a thing of the past, the military is not training new pilots at that rate anymore.
So, for the last 50 years we've had a pilot "bubble". We mistakenly thought it would last -- as most people do when they're in a bubble.
We also had a wealth bubble after WWII. Prior to WWII, in the Great Depression, flying was for the rich. After WWII, with our economy booming and America sitting astride the entire world, we had a "perfect storm" of "Lots of Pilots + Wealth = Booming GA".
All of that is gone, or nearly so.
The question is: What to do about it?
There are lots of things coming together that will (IMHO) resurrect G.A. They include:
1. Automation. We've now got UAVs that safely fly themselves right back to the numbers. This technology will find its way into GA, eventually -- probably in the experimental category.
2. Government downsizing. It now appears inevitable that the U.S. government will be downsized, perhaps by as much as half. The only question remaining is whether it will happen systematically and logically, or abruptly, against our will.
Once THAT happens, much of the oppressive and silly regulations that have stifled pilot growth and aircraft certification for two generations will go away.
3. Efficiency. Just since I learned to fly, airplanes have become MUCH more efficient. None of us ever believed a fixed-gear airplane could fly faster than a Bonanza -- but that's where we are now.
This drive for efficiency has been directed at increasing speed -- but with the price of fuel going up, IMHO this will be re-directed toward making airplanes cheaper to operate per hour. Light Sport aircraft are already flying at 5 GPH or less.
4. Greater Utility. With a down-sized government, we may be facing an extended period of road maintenance cut-backs. Imagine if the interstate highway system were to fall into disrepair, how that would impair travel.
This could make light aircraft "the way to go" again, like they were in the '50s.
These admittedly somewhat depressing options may be our best bet for growing GA in America.
As for the REST of the world, I think the future for expansion of GA is bright -- IF their political systems allow it. China, for example, will have ample wealth and all of the conditions for GA growth in place (poor road system, vast distances to cover, etc.) -- but this can only happen if their rulers allow GA to develop unfettered.
Meanwhile -- I will fly as long as I can.