It's simply the fact that nobody wants to fly anymore. That is somewhat of an overstatement, but it's not far off. Many part 61 schools have found it is simply not feasable to operate anymore. This holds especially true if they are into charter, sales, maintenance, or FBO services.
The demand for instructors is falling with the number of student pilots. The few exceptions are those who are seeking aviation as a vocation. Many instructors are choosing not to renew because of this as well.