The hobby with level out at at a smaller number of true hobbyists.
For a while you needed a compact camera or DSLR to take ANY picture: artsy, "bookmark", and everything in between. Many people bought dedicated cameras to get their photos, not because they wanted to operate a camera. Now that everyone can take a good photo with modern smartphones, only specialized types of photography and people who use cameras as a hobby will bother with carrying a dedicated device.
I'm sure if you went back to 1986 you would find some magazine writer complaining about how Fuji disposable cameras were ruining the hobby by allowing people to take pictures without learning exposure or focus. It's the exact same thing, except today's phone photos are 1,000x higher quality.
Photography is more popular than at any other time in human history. You just don't like the shapes of the devices used.