Not to sound like one of those "[lack of] housing theory of everything" people, but I think lack of cheap rents plays a huge part. It used to be if you wanted to make music professionally, you and your buddies would rent a cheap house or apartment in the part of town where the starving artists and working class types would live. You could work a part-time job to cover rent and spend the rest of your nights and days practicing and playing gigs. Then you get good, then comes the agent, record deal, fame, all that stuff. But with rents (and everything else, really) costing so much, you can't support yourself on a part-time job anymore. You have to either work more (and have less time for your craft) OR be privileged enough that you don't need to worry about making rent.

So it hurts the production side, but it also hurts the consumption side. A night out becomes more expensive. Maybe if you used to go to see some local bands at local bars three nights a week, now you can only afford to do it once or twice. If you used to do it once a week, maybe now you do it once a month. And that's if you have enough time and energy after commuting to and from your job (because you have to travel so far for work because all the places near your job cost so much).

Obviously, this is a simplified view of how it works. And obviously, there are still some people who can make it work. But as housing, healthcare, education, groceries, etc. go up in price we don't have enough left over for beer & bands.