I don't think there is a single cause or solution for the current "condition" of pool, it's more like all of the above and then some...
I think it realy hurt pool to lose television as a venue. ESPN always did a poor job with pool in the US, but at least it used to be on TV and maintained a bit of mindshare... But now, it's never on; replaced with other events and sadly poker. On the rare occasion it is on, it's mostly artistic/trickshot pool, or one or two semi-finals out of the Challenge of Champions which has a horrible format... I can't stand to watch any of it.
Of course poker, the Internet, and the resurgance of video games has really drawn attention away from tradional passtimes. This just is what it is, if people want to watch and play poker, that's their choice. It actually shouldn't be a choice of one over the other, but who has time these days to pursue all their desires.
The pool venues really tend to leave much to be desired. As mentioned by others, a room with some tables and a few drinks is not exactly a draw to get people in the door to have a good time... You really have to love pool to put up with that. But on the other-hand while a fully stacked hall is more enticing, it's a heavy investment to have a nice hall with nice equipment, a kitchen, wait-staff, etc... And you have to acquire all that without raising prices because people are f'in cheap.
As for starting kids in when they are young, that's a good idea, except I would never bring my kid into a pool hall. Lots of shady people, lots of adult behavior, lots of assholes, drinking... And that's in the nice halls (not to mention that as a player I get annoyed with kids at the pool hall, lol). My dad took me to the local university campus and we played pool there weekly... But as a matter of "progress" they shed their pool tables (as well as close their bowling alley); times change.
I think peer recruiting is also a good idea, but it's pretty difficult unless the person has an open mind or is predisposed to want to play pool; pool is intimidating to most inexperienced people. Besides fear, a lot of people don't have the patience to pick-up pool since it has a steep learning curve. Plus most people think of the pool community as loaded with sketchy people, hustlers, and gamblers and they want no part of it.
I think handicapped leagues are a great way to grow the player base, but the majority of people you recruit into pool via leagues just want to have fun and grow organically. They aren't hardcore, they don't want to gamble, and they like their handicapped pool. The non-handicapped leagues will tend to appeal to hardcore pool players and are too intimidating to casual players.
I think the pain in the pool world we feel now will remain for a while. I think that pool will cycle back into favor eventually (my predictions are usually wrong btw). I think the popularity of pool in Asia will spill-over into the US. While we have some incredible talent in US pool now, many of the pros don't seem to have their heart in the game these days. There are a lot of up-and-coming players who will want to gun for a piece of the pie in Asia, and maybe that will stir the pot a bit. Hopefully enough to justify an improvement in the pool business model here and the pool community.
That's all pretty much unformulated though on my part, plus I'm sleepy, so if it doesn't quite make sense it's not because I'm an idiot, just that I'm off-kilter
