First I have sent an e-mail to Bob with your name - hope its the correct address but it should be ok.
Shodokan Honbu, and I believe the same is true for Aikikai Honbu, also function as neighborhood dojos. Sure both have people who come from abroad, have university students and members from other dojos but many are housewives or working people that are there for health and hobby. In fact I would go so far as to say that these people form the core of the dojo. I think a lot has to do with the fact that many Japanese play as hard as they work. Just take a look at tennis clubs and music training. Budo training is very cheap compared to these endeavors by the way.
That said I believe the drop out rate after Shodan has to do with the removal of goal orrientated training. In the Shodokan system especially at the low kyu levels there is a grading every three months, Ikkyu to Shodan might be a year or more, after Shodan it could be years. Many Japanese start out with a goal in mind without understanding the deaper implications of Budo - once they achieve that goal they stick with their original plan like dogma. Still many continue and these are our future - and as for the ones that leave. Well until their departure they usually made good training partners.