I think it deeper than just a decline instructors.
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Diving is an expensive hobby. Cost wise, it ranks right up there with flying and shooting.
I think it has less to do with mindset of the younger generations as you seem to suggest. There are plenty of young 20somethings who are avid divers and invested in the sport and lifestyle to be instructors (check out any Caribbean or Asia-Pacific dive destination), so I don't fully buy your argument there. Older generations have always looked upon younger generations with disdain, and I cannot stomach that as I go into my 50s. The younger generation will always be lazy/impatient/disinterested/[insert gross generalization here] to those generations ahead of them, but in my opinion the next generation will always be better than us older farts.
Where I think you are spot on is the expense. Certain sports (shooting, flying, skiing) have a high cost of entry and maintenance. I've been an alpine skier since the 80s. Lift tickets were $50, and lessons $150 when I was a kid. This winter, one Saturday cost $210 with $1000 (not including tip) for my day long refresher instructor. Let's not forget $1000 skis & bindings every 3-5 years, $400 boots every 8, attire, lodging, airfare, gas, etc. etc.. Is that what it costs the mountain to operate and pay its employees a decent wage and show a profit, probably yes. Is that out of financial bounds for 20somethings carrying debt, starting out and trying to make ends meet, definitely yes.
Same goes for diving: if you want top end diving and top end instruction, it should be expensive to make it sustainable for those who make it a career (or even a 3-8 year stint). I don't think the agencies (and certainly not the diving cattle-car operators) have caught up with that.
I'd have to look it up (so excuse inaccuracy) but I recall a recent ski mag article that in the 90s there were some active 20m skiers per year. In 2022, the number had dropped to 8m.
I believe we will see the same in dive community as older generations retire (or expire) from diving -- although I hope you and I have many years left! -- and younger generations do not replace the ranks of instructors because it is not financially viable to become one.