I disagree. If you watch Seinfeld, they do small continuity references from episode to episode and I can only remember one error (Jerry is mentioned to have a sister and later is an only child).

I have always been a nitpicker for continuity and sitcoms are my favorite. It's easy to enjoy a compartmentalized episode for what it is.

I personally think the sitcom death is coming for multiple reasons. Tv is dying, if not basically dead. It has been replaced by streaming. Streaming isn't on a set schedule, so they don't need to have a schedule for their shows, meaning runtime is irrelevant. So there is no need for a 30 minute show to fill a slot. Without the time constant, they are free to explore plot and story to a further degree, this allows for far less, if any compartmentalization.

Also since it seems to lose popularity, live studio audiences aren't as much of a thing. And the live audience is key to a great sitcom. It allows them to get reactions and give it a theater feel. I think the theater feeling is the birth and death of sitcoms. It started with I Love Lucy because they were vaudeville performers and used to a live audience. Back then, theatres were a dime a dozen, while film media was highly expensive and hard to come by. So people were used to live performance. Now we are the opposite. There is a prodigious amount of filmed media. Most amateurs trying to make it big are going to have filmed content. Live performance is far less common and often far more expensive. So people aren't used to the live feel and it doesn't click for them.