I hesitate to comment here, but I will add my $.02 worth of opinion. I agree, as posted earlier that the CC series was defined as finite up front. I also think it was something of a trial balloon floated by Lionel at the time to test the market in response to customer input. This trial evidently showed this was a soft market for reasons previously stated , this point being evidenced by the carryover of a number of these products for 2 or 3 catalogs (nearly 2 product years) and the clearance prices offered on many of these products. I do not think the PW recreation products have ended abruptly. As others have stated there still are (new) PW flavored products on offer. I do think the PW recreation products faded a great deal as the CC products found limited success. That said, I think they were all excellent products for their intended market and I bought them all.
As a Post War enthusiast and conventional operator (using a cab 1 for the walk around throttle function) I have a small layout and favor the display layout visual format. For me, watching trains and accessories of the age much of this stuff is, still operate is a large part of the fun. I find myself wondering whose Christmas or Birthday present a given item was. Who's hands did it pass through over the years? What place of importance did it hold. For some of the items I have I was able to get those stories. This is another part of the fun for me. Repairing and restoring these old trains/accessories is enjoyable and rewarding. I like and acquire Post War, PWC, CC and some MPC. I suspect I am nothing special and there are a fair number of people in the hobby like me.
Obviously a large number of people in the hobby like the scale side of things and the electronic control and sound. I like watching their stuff run and talking with them about how they enjoy the hobby. These locomotives, rolling stock, and accessories are impressive to see and hear. I think these more contemporary products have more appeal to the general crowd likely to see trains in public for obvious reasons. I really think the number of people interested in searching for a $5.00 part to get a $150.00 50 year old locomotive running, and paying $6.00 to get it via mail, and then spending time repairing/restoring is a small and finite group. I think the out of the box/sound/electronic products draw a much larger following. There will always be those of us who like the old/conventional stuff just as the antiques business at large seems to do well and be fairly stable.
Conventional no longer a viable product? Not a contemporary product. But one with it's niche market certainly. There is so much Post War, PWC, CC and MPC stuff out there that I do not fear not being able to find what I want. At the end of the day it's all trains, it's all good, and we all are having fun. If I meet you I look forward to talking with you about how you enjoy the hobby. When I am at a train event/show I like to estimate the crowd and then compare that number to the population of the larger area in which the event is being held. It's always a (very) small percentage by comparison. Sort of puts all of the aspects of the Model/Toy Train Hobby in perspective.
Now, time to go put 6 or 8 PW cars behind the Nickle Plate GP7 diesels I just acquired and find a suitable caboose to run a train with. Where's my Cab 1?