It is somewhat sad to hear of Polk/Aristo's closing. The current economic climate is certainly challenging for the model train industry, while arguably some other business segments are booming. Yes, there are companies that are currently doing exceptionally well while other segments languish. But the economic debate is certainly for a different place than here.
Although I hope I am wrong, I think we will continue to see shake out in the model train industry that will lead to a combination of closings, consolidations, and especially more of the new normal practice of production tied to pre-orders.
Model Railroading is not an inexpensive pastime. There are some many activities competing for the available leisure time and money. I strongly believe that new or more specifically young blood is becoming less and less interested, or even aware of model trains. The absence of real and model trains in our society are making toy trains less relevant. Likely, unless you have someone in your family that can carry on the tradition and enjoyment of toy trains, the general population will continue to move away to other activities. The technological advances that make us "ooh and ahh" to the new model train features are also making huge strides with xbox, playstation, Wii, iPad-Pod video games, radio controlled toys and activities for often less than a piece of rolling stock. Compound that with the fact that youth athletic activities that were once seasonal, are now run year round and often at a significant financial and time cost to a family.
I think the challenges ahead for model railroading in the U.S. are daunting. We are in a declining niche hobby that won't necessarily go away, but will be significantly different than many of us have become accustomed. Current economic factors aside, this model railroad industry decline might be somewhat similar to that of the camera shops, record stores, video rental stores, and all the other businesses that are either gone or just a mere shadow of their former self due to changes in business and technological markets and personal choices. This opinion more and more reinforces the belief that this hobby needs continued toy train ambassadors and those people and organizations to promote the hobby.