The problem, from my viewpoint, is not the electronic toys themselves. The problem is that either parents don't want to be parents, or simply do not have the time.
Depending on what statistics you want to believe, nearly half the nation's children are being raised in a single parent household. Single mothers are not a big market for involved and costly hobbies like Legos or trains. And for the kids that have a mother and father, many of these are "working" parents, meaning "free" time is not what it used to be. Many of the electronic games or toys are self-contained, meaning no involvement, participation, physical exertion, or human interaction from anyone else. In other words, they are electronic babysitters.
Parents don't have time to play with their children, so go play with a video game. Or they're fearful to let their kids go play outside, so instead go to your room and play a video game. Whether there's justification or not, kids are being conditioned to be solitary, and to not have social interaction with anyone else.
A big part in the success of Lionel trains in years parts, was the marketing of the trains as a father-son hobby. And most of us adults in the hobby today, attribute our interest back to when our dad's got us our first Lionel train set. And then took the time (and money) to build a layout board of some kind. (Legos aren't cheap either.) Kids haven't changed... they still want that involvement from their parents.
And from reading here on this forum, the other change is that kids that do have a dad that kindles their train interest... the interest is ALL dad's. The kids get to run trains, but on DAD's layout instead of their own. In years past, it was the father's playing with the trains on their SON's layout.
I had at one time taken some kids from single mother households under my wing. One of those boys was always teasing for me to get him a video game system. I said, "I take you to the video arcade and you also get plenty of that with your friends. I will, though, buy you a train set."
"Oh that's old fashioned. I don't want that" he responded.
I responded, "Yeah, well I'm not just going to hand it to you. You have to build it and work on it with your own hands."
I could see his little brain working when he asked "You mean I would get to use power tools?"
"Sure. You're nine years old. Your mom isn't going to teach you" I told him.
Well, he did a 180 degree turn. Totally got into it. I designed the first layout and his response was "this isn't complicated enough." YES, just what I had hoped to hear. I think he was the only kid in his school class to have his own train layout... a point he took pride in!
This kid would have NEVER got into trains without someone pointing the way and then talking the time (and money) to engage in the hobby with him. Would this scenario happen with every single kid? Probably not, because kids are all different with different abilities and interests. The KEY is a parent taking interest in the child. Otherwise, there's always the electronic babysitter.
I have a friend who does prison ministry. One night we were talking and he said he consuls 88 men in the prison. I asked, "how many of those guys had an active father in their lives?" His face became sullen, and he replied, "out of 88 men, not a single one of them."