I think the truthful answer is that it's probably not going to change. Several trends are all connected: low volume, low pay, smaller combos. People here often mention brew pubs and wineries as one growing segment of venues that have live music. That is definitely the case around here. But those places (restaurants too) mainly want small acoustic combos. One guy with a guitar. A duo. Maybe a jazz-type trio. Usually not full bands with 50 watt amps. The music is for ambiance, part of a social experience, it's a bonus rather than the focus.That's probably the fundamental reason for all of this. I think you nailed the core of the problem here.
The question we should now be discussing is how to reverse this trend.
There are other venues where you buy tickets specifically to see a band, and that is the main attraction. Obviously that is a totally different thing. I mention it only because these two different types of things seem to frequently get confused with each other on these threads.