What's really happening is you're getting a lot of the smaller clubs disappearing for multiple reasons. As a result, kids are hitting junior high (and even high school) with no experience at all. Even when your numbers are still up (which they are) the quality drops.
Our school district used to give us space for free as long as we kept our dues low, since it's a dedicated mat room and nobody else was going to use it. Now, they want top dollar. While we're paying it and charging parents accordingly, it's caused our numbers to drop significantly. The two other clubs in our area both ended (one due to lack of affordable space and the other due to the coach retiring and not passing it on).
Wrestling's advantage over something like soccer was that it was cheap for parents and the real "cost" was hard work and dedication. Now that the cost is up, one of our biggest appeals to parents who weren't wrestlers themselves has evaporated.
Smaller clubs disappearing is nothing new - it's happened all the time (especially when one coach controlled the club, when they were done they'd just pack up and go home). However, now, the barrier to entry is a lot higher between both cost and red tape with requirements for things like charters, liability insurance (which has skyrocketed in the past few years), not to mention how many ADs just don't want the extra hassle so are closing their doors to anything not directly school related. It means that as some clubs phase out, there aren't new ones popping up to replace them.
With all that said, we have noticed that our numbers are coming back up in the past year and a half and we have fewer parents treating us like a free babysitting service than before, so the quality is returning. If the other clubs are experiencing the same as us, the quality on the mat will catch back up.