If there is a decline on any kind it will ultimately have its affect on the quantity and quality of new material that is generated.
You can have a great time in the game with a very limited number of people in the overall population... but the more limited that number is, the less revenue is created for Blizzard from subs, which means less money and time spent on developing the new content that people yearn for.
You can see this to some degree even now if you compare amounts of "unique" material (and not re-scaling or recycled jobs) over the last few expansions to the first few. Do a quest, then maybe do it again as a Daily Quest... Do a Dungeon, then maybe do it again on over a dozen various difficulties... Or maybe do the same Dungeon that you did 10 years ago, but it has been rescaled with maybe a modification or two.
In general, these types of things were pretty rare back before the game was in a state of decline. Now they are a standard format.