I wonder if all the "marginal" dojos out there are part of the problem. There are probably enough aikido students in my area to support a full time instructor, especially since such an instructor would likely attract even more students. But we are divided into at least half a dozen small clubs, none open more than 3 or 4 days a week. Not a great situation in my opinion.
Well, it's sort of like the economy... all sorts of stuff was possible when we were in a high growth mode. When Aikido was growing like crazy, it was possible for many dojos to exist. Seattle has around twenty dojos in the immediate metro area. Most are run by people who have trained thirty years or so but there are any number which exist only because the instructor was from some organization or other and his or her teacher told them to open an affiliated dojo rather than train in a different group.
Some of this is due to the "Japanese mystique" phenomenon. A Japanese Shihan would attract all sorts of students and might very well have an array of 5th and 6th Dans training and perhaps teaching at his dojo. But a non-Japanese teacher doesn't have that kind of clout... So no one with even mid-level rank like 4th Dan really wants to put himself under someone who he thinks is really pretty much just like himself. No one wants to concede that anyone else is better than they are. Of course everyone is pretty much polite about it all... They say "my approach is different" or our "style is different".
Now that the demographic seems to be changing and the young males who made up the bulk of new students in the martial arts previously don't want to do traditional arts any more (they want to do that stuff they see on prime time cable every night (i.e. they want to fight) it's a lot different. If you want to survive you have to be good. You can be very good at technique and have mediocre people skills, you can have mediocre technique and great people skills and you can still keep a dojo healthy and even growing. But if you are not very good at something, your dojo will be marginal will probably close at some point.
I am already seeing teachers who went through the usual development process of starting in a school or community center and then worked up to a dedicated space over the course of many years of hard work and now they are finding they can't keep the doors open. So they move back into a community center or some such. I think we are going to go through a period of retrenchment. A dojo will have to give prospective students a real reason to be there. If they can't do that, there won't be the steady influx of new students to keep things afloat.