The economics of the music business have shifted so dramatically over the last few years that it would be all but impossible to conclude anything else--guitar music is dying.
David Byrne is at the forefront of understanding the economics of the music business. He has been demystifying it for years. And when he says that the era of making money from recorder music is over, he means that there's no mechanism in place to exist as a musical act that isn't built to become a million selling act from the beginning.
The arguments about whether or not an artist should get paid for what they do are essentially over. The "free" era has given way to the "forget about it" era and artists are abandoning the music industry or are rapidly changing how and what they do in order to survive. If you're in a guitar band and you require a high-quality analog process for recording your music, who is going to advance you those funds? It's all well and good to make electronic music on a laptop, but the process of making guitar music requires a certain amount of space and equipment. You can make a guitar album in your basement, but if it doesn't sell, is it because of the sound quality or is it because of the indifference to the genre as a whole?