merchant account closing, lack of x-sell, lack of new ideas, bad biz practices, I think are all contributing factors, and overall more free porn makes it a bit harder to keep up ratios.
I welcome the shrinkage, however I think there will be more free porn sites being made because less paysites will be made as everyone tries to jump on the free content wagon to try to earn a buck. Maybe it will be good? I think in the end Dating sites and cam sites are the only things viable long term for the big bucks, unless of course you are putting out awesome exclusive stuff like you Dave!
side note: I got a new merch account to add to my portfolio over the last 2 months, so they are harder to get, but not impossible... but mine is US based, EU is impossible from what I can tell since I've been trying for a year now.
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