There are less good films, there are more bad films, so yes, I do think brickfilming is going downhill. I've got several theories about why this is, but if I were to pick one, I'd say that most people just don't care about it.
Think about it. A lot of the very well known brickfilmers these days are a) pursuing some film-related career/major, or b) are already working in film. There are a few exceptions, like Buxton (0ldScratch), who writes financial software for a living, which is hardly film related. However, I do remember that Buxton had a whole load of animation tests done before he worked on Out of Time, his first brickfilm, and although his profession isn't film related, I can't say that he doesn't have an interest in film. On the other hand, we've got Jay Silver (The Gauntlet, Rapunzel) who is currently an animation director on an educational show, I believe. Then we've got the more recent generation of "greats," including Night Owl, who has an immense interest in cinematography; Smeagol, who is studying film; KG, who I'm certain is studying animation, and so on.
Then we've got everyone else, who may or may not have picked up a book or two on animation or filmmaking, but probably learned everything they know about animation from this site, which is probably one of the least intelligent things to do if you've got a real interest in some aspect of film. We're almost all amateurs here; don't expect to learn much here. I know I've only visited one other online animation forum, and only read one book on animation, but that book was written by Richard Williams, animation director on Who Framed Roger Rabbit, and a respectable number of the active members on that animation forum are actually working in the field. In the 12-18 months I've visited that site and read that book, I feel as if I've learned so much more about animation than I have since I joined Brickfilms.com back in 2005, because I'm learning from people who are at a level much higher than my own.
Perhaps I've wandered off my main point a little bit. Perhaps I've stuck my foot in my mouth. However, I do feel that many of the people making brickfilms now just aren't willing to do the work necessary to make a good brickfilm, and that is why brickfilming has gone downhill.
"[It] was the theme song for the movie 2010 first contact." ~ A YouTuber on Also Sprach ZarathustraCGI LEGO! Updated occasionally...