I think it's somewhat sad, to be honest.
A lot of different factors.
Kids these days (hahaha, am I getting old or what?!) tend to be less active outdoors. It's a simple fact, at least in this area. My 7 year old son doesn't get out nearly as much as I did as a kid, and that is his parents fault due to the retarded hysteria about the "dangers" of him being out of sight for more than 5 seconds. I include myself in that, but at least I realize I'm somewhat insane.
When you don't play the game from a young age and learn it's intricacies, a game like baseball really starts to get boring as hell. Football though, the average person simply cannot play competitively but still be wow'ed by the athletic catches/runs/hard hits/etc.
The other reason, for me at least - was the strike. It hit during the "formative" early-teen years, and it hit hard. Everyone in my 7th grade class were HUGE baseball fans (well, the boys) and we traded baseball cards all day long. After the strike, a lot of the magic was simply lost, and many no longer had much interest. I know they have had labor issues in the past, but this one just seemed to hit "kids" hard for some reason. Those kids then grew up into the young adults who largely ignore the game today.
Also the world simply moves at a faster pace. 90% of the young population doesn't have a f-in clue about the "behind the game" game taking place w/ management, pitching matchups, etc. That is where baseball is interesting - not watching homeruns and the like. Baseball as a "wow me" sport simply does not compete with the likes of the NFL or NBA. It's very difficult to try to explain to a complete noobie the game in one sitting, vs. football - where they can immediately get into the game after 5 minutes of explanation.
So yeah.. I find it somewhat sad, and somewhat of a mark of what this country is becoming. But then again, I'm a negative person by rule
To the other guy from MN - interesting you're in this area, I am too!
-Phil