I think "people" are still interested, however it's partly an age thing and also an information issue - I think both points have already been covered quite well in this discussion.
Dr Dre / Ludacris / etc have a lot more clout with the "yoof", so their products will be seen as superior regardless of the actual truth; same as with BOSE and iThings, although these latter two hold more clout with the older generations too.
House space is often a poor excuse - a decent HiFi system can take little space if you want it to, and you definitely don't
need great big floorstanders. A lot of people nowadays don't actually really care about sound quality, hence the rubbish iHeadsets etc (to their credit, they've recently released slightly better ones, but they're still overpriced for what they are), the success of BOSE, youth happily listening to songs from an incredibly badly sounding phone speaker, etc - it's also much more convenient to not bother and just make do with whatever's there when the path of least resistance is
SO easy to follow.
Honestly, outside of these AVF circles and any other audio nuts you may know, how many people can you count who will sit down and actually listen to an album as (reasonably) critically as they could? I can't think of anyone... Or how many would actually sit down in a shop for a good few hours in order to choose the best TV for them or to listen to a few amps and speakers to see what they'd want to buy? Again, I can maybe think of one, maybe two at a push. I don't think I need to explain how most people will choose, you lot on here are well aware of how it works with most people
I believe music has become more of a slight distraction, a "filler", something to keep our senses somewhat occupied in this age where we have to ALWAYS BE DOING SOMETHING (I'm looking at you, Blackberry... thanks for starting that); as such, the quality aspect has become a lot less relevant unless you specifically care about it and/or know better and care enough. The Beatles might've not been the epitome of meaningful lyrics even compared to Nicki Minaj and all those others, but in a way they all provide(d) somewhat light entertainment yet The Beatles were considerably more interesting, so to say.
But hey, I'm 29 and somewhat afflicted with this whole Upgrade-itis brouhaha, so I'm doing my part as much as I reasonably can.