I remember the high population days and what the ban on gambling did to change that.
The whole "SL is dying" argument has been around for years, and the reality is, it's always going to be there. Fairly rapid development is still happening with the viewers and their underlying server technologies, and I'm seeing new businesses pop up left and right. I think it's far from dead.
There is, indeed, a pretty steep learning curve to this game. Many create accounts, login for a day, get frustrated, then leave.