Most "people" simply do not care about hosting anymore. They don't care to start up sites or blogs because there's simply no point in doing so anymore. As pointed out above, the Internet has changed over the last few years, primarily because of social networking. We used to run an extremely popular Invision forum that was online for about 6 or 7 years. Around 2006, we noticed the popularity of it declining rapidly and then around 2008, it was completely dead. We finally just took it offline. Will the Internet change? Yeah probably. Look at MySpace, it was all the rage around 06 and then FaceBook slowly took over after they started allowing everybody to join. Now MySpace is practically worthless. (I know I don't use it anymore, and most of the people that I know do not use it anymore either.) FaceBook is the new thing. I have been a member on FaceBook long before they opened it up to the world. In my opinion, it's on a fast track for failure too as bots and spam are beginning to increase more and more. But for now, it's hot. I guess we'll see over the next few years how it pans out.
Being a host in this business for over 10 years now, I have saw this market flourish and also trough. Another problem (at least I think it's a problem) is that the cost of technology has dropped so sharply over the last decade, that now virtually anybody can get their hands on a VPS or Dedi and become a "host" pretty much overnight. Is that bad? It depends on who you talk to. In the late 90s and the early part of 2000s, people would give their left arm for 100 MB of free space on the Internet. Back then if your server had a 800MHz processor, 256MB of RAM and a 40 GB hard drive, you were top of the line. You could lease out 500MB chunks of that server and make really decent money. Now you have every Tom, Bob, and Harry on here giving out 15 and 20 GB of space for nothing.
Don't get me wrong, you can still extend your services globally and pick up a few clients online, or offer some free hosting to your buddies on here, but the only way to make money in this markey, the way it stands right now, is to market locally or dip into specialized markets. Believe me, I've tried it all.